Local Government Pensions to increase by 3% in 2018March 13, 2018
Local Government Pensions will increase by 3% on 9th April 2018. The increase to your pension benefits is calculated in line with the CPI inflation figure as at September 2017.
Active Members (members currently paying into the Scheme)
Under the LGPS Regulations 2013 the employee contribution bandings are uprated each year in accordance with the Pensions (Increase) Act 1971.
The Fund has received provisional guidance of the pay bands and contribution rates which will operate in the Local Government Pension Scheme (LGPS) from 1 April 2018. The expected contributions table for 2018/2019 can be found on the contributions web page.
Please note that your contributions to the LGPS cover the cost of providing your (and any survivors pension benefits in the event of your death) but do not determine the benefits you receive on retirement. The contribution rate you pay is based on your salary and any overtime and/or additional hours that you work. This forms your pensionable pay which is used to calculate your benefits. If you have more than one job, each will be banded individually. Your employer determines your contribution rate by assessing your pay.
If you joined the scheme after 1 April 2014, your pension benefits will build up yearly by accruing 1/49th of your pensionable pay. For more information on how your pension is calculated visit our website.
Retired Members (members in receipt of a pension)
Local Government Pensions in payment will increase by 3% on 9th April 2018. The increase to your pension is calculated in line with the CPI inflation figure as at September 2017.
Because the increase isn’t applied until the 9th April 2018, your April pension payment will be a combination of two different rates. The first part of your April payment will be based on the current rate that applies from the 1st of the month to the 9th; the second part is the increased rate that applies from the 9th to the 30th. From May you will receive the full 3% pension increase.
If your pension began on or after 10th April 2017, you will receive a proportion of this year’s pension increase. This proportion will depend on how many months your pension has been in payment. Your new annual pension figure will be shown on your P60 payslip document sent out at the beginning of May.
Deferred Members (members who have left the Scheme before retirement but still have benefits in the Fund)
If you became a deferred member prior to 1st April 2017 your benefits will receive the full 3% increase. If you left the scheme after 31st March 2017, you will receive a portion of this increase.
These changes will be reflected in your Annual Benefits Statement which you will be receiving in the summer. You can view your previous Annual Benefits Statement on our secure members’ area ‘My Pension Online’.