INCREASES TO YOUR PENSION
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Your LGPS pension increases with the cost of living |
Retirement pensions are increased every April in line with the cost of living (Retail Prices Index) for the 12 months to the end of the previous September - protecting their purchasing power. If you retire early before age 55, apart from ill-health retirement, your pension is normally paid at a flat rate until age 55, when it will be increased to the level it would have been, had it been increased every year by the rise in the cost of living since your early retirement.
If you are retired on ill-health grounds, your pension is increased each year regardless of your age. If you haven’t been on pension a full year, then you won’t get a full year’s increase unless we have used a previous years final pay to calculate your benefits. For example, if you retire in September, you get half a year’s increase.
Guaranteed Minimum Pension (GMP)
The Local Government Pension Scheme (LGPS) was contracted out of the State Earnings Related Pension Scheme (SERPS), so if you were a member of the LGPS between 6 April 1978 and
5 April 1997 the LGPS must pay you a guaranteed minimum amount of pension (GMP) based on the state entitlement you would have earned if you had not been a member of the LGPS during this time.
At State Pension Age your pension will be compared with this GMP and increased to the rate of your GMP should this be higher. In most cases, your LGPS pension is higher than your GMP.
How increases are applied to your LGPS pension from State Pension Age
Up to state pension age your LGPS pension is fully increased and paid by the Fund. Once you reach State Pension Age, the Department for Work & Pensions (DWP) pays the increases on the GMP part of your LGPS pension with your State Pension – although the Fund has to pay the first 3% increase on the GMP generated by any membership after April 1988.
