What counts towards final pay to work out your benefits in the LGPS before 1 April 2014?

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YearsWhilst the LGPS changed on 1 April 2014, protection is in place to ensure that your final pay is used when you leave to work out your pension for the membership you built up to 31 March 2014. 
The definition of final pay for benefits built up before 1 April 2014 remains the same as before the Scheme changed from a final salary to a career average scheme on 1 April 2014.

Final Pay for benefits built up before 1 April 2014

This is usually the pay in respect of (i.e. due for) the final year* of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher, and includes your:
  • normal pay
  • contractual shift allowance
  • bonus
  • contractual overtime
  • Maternity Pay, Paternity Pay, Adoption Pay and Shared Parental Pay, and
  • any other taxable benefit specified in your contract as being pensionable.
This may not include all your pay.
  • It does not include non-contractual overtime, travelling or subsistence allowances, pay in lieu of notice or pay in lieu of loss of holidays, any payment as an inducement not to leave before the payment is made, any award of compensation (other than payment representing arrears of pay) made for the purpose of achieving equal pay, nor (apart from some historical cases) the monetary value of a car or pay received in lieu of a car.
  • If you receive pay after 31 March 2014 which relates to work carried out before 1 April 2014, this will be allocated to the pre 1 April 2014 period for which it was due. If you cease membership of the scheme within 12 months of when the payment was due, it will be included in the final pay figure used to calculate benefits on your pre 1 April 2014 membership of the Scheme. It will not count towards the pensionable pay used to work out your pension from 1 April 2014 in the career average scheme.
  • If you are working part-time when you leave the LGPS, or worked part-time at some point during your last year of membership, your final pay is the whole-time pay that you would have received, if you had worked whole-time.
  • If your pay is reduced in this period because of sickness, your final pay will be the pay that you would have received if you had not been off sick. 
  • If you have maternity, paternity, adoption or shared parental leave in this period for which you paid (or are deemed to have paid) pension contributions, final pay includes the pay you would have received had you not been on maternity, paternity, adoption or shared parental leave.
  • If your pay is reduced or increases to your pay are restricted in your last 10 years of continuous employment with your employer, because you downgrade or move to a job with less responsibility, or as a result of a job evaluation / equal pay exercise, or because of a change to what is specified as pensionable pay in your contract (using the definition of pensionable pay before 1 April 2014), or is restricted for some other reason, you may have the option to have your final pay calculated as the average of any 3 consecutive years’ pay in the last 13 years (ending on a 31 March). 
  • Such an option must be made to your employer no later than one month before leaving. You cannot make use of this option to use earlier years’ pay in working out your benefits if the reduction or restriction to your pay was as a result of the loss of a temporary increase in pay, or resulted from a reduction in your grade in order to take retirement benefits on flexible retirement.
  • If your pay was reduced or restricted for reasons beyond your control before 1 April 2008 and you were issued with a certificate of protection from your employer and you leave the LGPS within 10 years of the reduction or restriction in your pay, then we will work out your final pay as the best year’s pay in the last 5 years, or the average of the best consecutive 3 years in the last 13 years after allowing for inflation.
*Grossed up to a full year’s pay if you did not receive pay for a full year.