INCREASES TO YOUR PENSION
2.7% Pension Increase from 7 April 2014
The Government has confirmed that local government pensions will rise by 2.7% from April. This increase is in line with last September’s inflation figure, as measured by the Consumer Prices Index (CPI).
Merseyside Pension Fund has no discretion in applying this pension increase. We are bound by the provisions of the Pension Increase Acts of 1971 and 1974, to increase pensions as instructed by the Government. We cannot pay either more or less pension.
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.