How is your LGPS pension worked out?
The LGPS is a defined benefit scheme; this means the pension benefits you receive on are worked out using a set formula. From 1 April 2014, is a Career average revalued earnings scheme or CARE scheme. This means for each year you are in the scheme, your pension builds up based on a proportion of your pensionable pay received in that year.
Depending on when you became a member of the LGPS, there will be a specific formula to work out how your benefits have built up for that period of membership.
All membership up until 31 March 2008
Membership between 1 April 2008 to 31 March 2014
1/60th of your final pay (2008 definition) for each year of membership
Membership from 1 April 2014
This means the pensionable pay you receive for each scheme year you are a member will be divided by 49 and will equal the pension built up for that year. Each following scheme year of membership will build up the same way and will be added to your pension account. To ensure that your pension account keeps up with the cost of living, it will be revalued each year.
Amount of pension built up for individual scheme year in pension account =
Pensionable pay (2014 definition) divided by 49
Can I take a lump sum?
All members have the option to give up some of their annual pension for a tax-free lump sum on retirement. For every £1 of annual pension given up, you get £12 of lump sum. The amount given up can’t be more than 25% of the total capital value of your benefits. We’ll tell you how much lump sum you can have, when your benefits become due.
Not a member of the LGPS?
A pension account modeller is available on the national LGPS member website. This will help you understand how the LGPS works, and shows how a pension builds up from 1 April 2014. The modeller doesn’t provide you with an estimate of benefits.
Pension account modeller (This link will redirect you the the national LGPS website)