From 1 April 2014 your pension benefits are based on your actual pensionable pay, including overtime and periods of absence.
Increases in pay
If you receive an increase to your pensionable pay, the amount of pension benefits you build up in a year will also increase.
We may contact you about your annual allowance if you receive a large increase in your pensionable pay. Your annual allowance is the total amount of pension benefits you can build up in each scheme year for tax relief purposes.
Decreases in pay
Your pension built up to 31 March 2014 is based on your pensionable service up to that date and your final pay when you leave active membership of the scheme. Final pay is either the average full time equivalent pay in the last year of active membership, or either of the two previous years, whichever is highest.
If your final pay has been reduced or restricted during your employment due to the following reasons, you can apply for a 10-year pay protection:
- you chose to be employed at a lower grade or responsibility
- equal pay exercise
- a job evaluation exercise
- a contractual change affecting pensionable payments
- a restriction to future pay increases
If your employer approves your application, when working out your final salary linked benefits, we will use your average full time equivalent pay from the best three consecutive years. This is within a period of 13 years up to the last day of your active membership.
Applying for pay protection
If you believe you may have been affected by a reduction or restriction to your pay, you can use the 'reductions in pensionable pay' form attached to this page.
If you decide to apply for pay protection, please send your completed form to your employer who will complete 'section 4 – employer declaration'. You can apply up to 30 days before you're due to leave the scheme.
Your employer will consider your application for pay protection, and write to you with their decision, including any reasons for their decision. They will also provide a copy of our appeals leaflet.
Leaving to work for another LGPS employer
If you leave your employer, but then start another LGPS contributing job and opt to join the pension records together, your pay protection would no longer be valid.
If you decide to keep your records separate, your protection would still apply when we work out your pension benefits for the employment you have left.
Final pay examples
The examples demonstrate the different methods of assessing the final pay to be used in the calculation of benefits, for membership up to 31 March 2014.
Where a final pay figure used in the calculation of benefits is not from the last three years of membership, as in the following examples two and three, the final salary benefits are increased in line with inflation up to the date of leaving.
In example three which compares consecutive three year periods from the member’s last 13 years’ pay, pensions increase is applied to the average pay for each period, from the end of that period to the date of leaving.
Emma leaves the LGPS on 30 November 2023 and their last year’s final pay is the highest, so the final pay used is the pay for the period 1 December 2022 to 30 November 2023.
Joe leaves the LGPS on 30 November 2023. Their pensionable pay was lower in their last year, so the higher of the previous two years is used.
Joe’s last three years’ pensionable pay figures are:
- 1 December 2022 to 30 November 2023 = £15,950
- 1 December 2021 to 30 November 2022 = £15,880
- 1 December 2020 to 30 November 2021 = £16,130.
The final pay used in the calculation of Joe's benefits is £16,130.
Trevor had a reduction to their pensionable pay on 1 April 2020. They applied for final pensionable pay protection, which was approved by their employer. The 10 year protection applies until 31 March 2030.
The calculation of Trevor's final salary linked benefits, uses the average of the highest three consecutive years’ pensionable pay within their last 13 years of active LGPS membership.
When compared with pay in more recent years, Trevor's highest consecutive years were:
- 1 April 2019 to 31 March 2020 = £19,870
- 1 April 2018 to 31 March 2019 = £19,320
- 1 April 2017 to 31 March 2018 = £18,860
Trevor's final pay is the sum of the three pensionable pay figures, divided by 3: £19,350.
Links to useful documents