Important – Furloughed LGPS members

Publication date: 17/04/2020 11:32:46

We want to draw your attention to the questions about furloughed staff on the LGPS FAQ page as pension benefits will be affected if members aren't getting 100% of their usual pay. Furloughed members still build up a CARE pension under LGPS regulations, but only on the actual pay they’re getting. If the furlough pay is less than their normal pay (because you've chosen not to top up pay to 100%), the pension they build up will also be less. The member can choose to buy additional ‘extra’ pension to make up for the pension lost during this period, but you don’t have to split the cost with the member, although you can choose to. It’s suggested that you make a decision on this and tell your staff so they understand the consequences for their pension if they’re not getting full pay.

Furlough pay is pensionable pay under the regulations. Employee and employer contributions should be taken based on the actual pay the furloughed employee gets. Assumed pensionable pay won't apply in these cases and you should be sending us actual pay through i-Connect.

There are also implications if a furloughed LGPS member has pre 2014 final salary service and leaves employment in the next 12 months. As final salary benefits are usually worked out using the pensionable pay earned in the year before leaving the scheme, for furloughed members this year may be lower than usual. However, one of the two previous years' pay should be used, if higher, in line with scheme rules. This should stop final salary benefits from being negatively affected if the member’s pay is reduced due to being on furlough. If you plan to furlough any LGPS members, please let us know so we can send you a spreadsheet to fill in with affected members. We‘ll then be able to record these members for the future.