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Deferred
How your deferred pension is worked out

How are my deferred benefits worked out?

On 1 April 2014 the Local Government Pension Scheme (LGPS) changed from a final salary scheme to a career average scheme. It’s still a defined benefit scheme so your pension is still worked out using a set formula, but the formula has changed.

For membership before 1 April 2014

We work out your pension benefits for your membership before April 2014 based on your final pay and the length of your membership when you leave or retire. The pay we use to work out your pension benefits on your membership before April 2014 is your pay when you left the pension scheme, or one of the previous two years if that’s higher. And if you were working part-time when you left the scheme, it’s the full-time pay you would have got, if you’d worked full time. You will be able to give up some of your pension to get a tax free lump sum when you take your pension. For every £1 of pension you give up, you’ll get £12 of tax-free lump sum (HM Revenue and Customs limits apply).

For membership from 1 April 2014

Every year you’re a member of the pension scheme you get a pension of 1/49th of your pay. That’s added to your pension account. (If you chose to be in the 50/50 section of the scheme at any time, you’ll get half the normal pension for that period.) Your pension keeps pace with the cost of living, so we increase it every year in line with the Consumer Prices Index. When you take your pension you’ll be able to give up some of your pension to get a tax free lump sum if you want to. For every £1 of pension you give up, you’ll get £12 of tax-free lump sum (HM Revenue and Customs limits apply).

Membership before and after 1 April 2014

If you have membership before and after 1 April 2014, we work out the pension benefits you built up in the scheme before 1 April 2014. Then we add this to the pension you have built up in your pension account from 1 April 2014.