Pension benefits - Frequently asked questions

For pension benefits built up before 31 March 2014, you get a proportion of your pay for every year and also the days that you are a member of the scheme.  

For pension accrued before 31 March 2008, the proportion is an 80th of your whole time equivalent pay.  

For any pension built up after 1 April 2008, it is an improved 60th rate.

However, from 1 April 2014 that formula is different because the Scheme changed from a final salary scheme to a career average scheme:

• For each year in the new scheme, you will build up a pension based on your actual pensionable pay in that year. 
• For each scheme year that you are a member after 1 April 2014, a pension equal to a 49th of your pensionable pay will be added to your pension account.
• For each year that passes, the amount of pension that is building up is revalued in line with inflation.  This could be an increase or a decrease, depending on the Consumer Prices Index.

At retirement you will be given the option of providing a lump sum by exchanging part of your pension at a rate of £12 for each £1 of pension given up. There is a maximum amount that can be commuted in this way.

You already have accrued a lump sum based on the pensionable service you built up before April 2008. At retirement you will be given the option of increasing this lump sum by exchanging part of your pension at a rate of £12 for each £1 of pension given up. There is a maximum amount that can be commuted in this way.

If you pay AVCs arranged through the Local Government Pension Scheme (LGPS) your contributions will cease when you retire and you can use your AVC fund to improve your annual pension, or take as cash as part of your lump sum. Full details are provided at the time you retire, so that you can decide what to do.

If you receive reduced pay due to child related leave then the pension that you build up during that period of leave will be unaffected by your absence. This is because your employer will calculate an ‘assumed pensionable pay’ figure for you which will instead be used to work out your pension for that year, ensuring that your retirement pension is not reduced in any way.

Where you do not receive any pay or Statutory Maternity Pay (SMP) that period will not count towards the pension that you have built up for that year, unless you choose to replace that period by paying Additional Pension Contributions (APCs) when you return. If you decide to do this, your employer will share the cost with you and pay 2/3 of the total amount. If you are interested in receiving a quote for a leave of absence replacement APC, please print, complete and return this form to the Pension Section if you wish to make an enquiry:

Additional Pension Contributions (APCs) quote request form

You will need to ask your payroll section to complete part of the form as well.

Your pensionable service will be considered to have ceased at the end of your paid maternity leave.

You will receive an annual statement each September which gives you a prediction based on current values.  You can see this online if you register to access your online pensions account

If you choose to take your pension before your Normal Pension Age it will normally be reduced, as it’s being paid earlier. If you take it later than your Normal Pension Age it is slightly increased because it is being paid later.  Please ensure that you are aware of the effects of any reductions before deciding to retire early, as the reductions can be substantial. 

The benefits projector on the Online Service  will show you the effect on your pension of retiring across a range of dates, which will help you plan for the future.
The amount of any reduction or increase will be based on how many years earlier or later than your Normal Pension Age you draw your benefits. 

The Pensions Section can only provide a written forecast if:

• you need an estimate for a reason which is not covered by one of the online benefit projectors
  

OR

• you are planning to retire within the next 6 months

If this applies to you, please email pensions@leics.gov.uk quoting your National Insurance number, providing a suggested date of retirement and the reason for your retirement, and we will calculate the figures for you and send them out to your home address. 

If you are thinking about Flexible Retirement, then you will need to contact your Employer first, as all FR estimate requests must come through them.  The Pension Section does not provide ill health benefits under any circumstances, until the tier awarded by the employer is known.

The LGPS provides statutory pensions increases. This means that after age 55, your pension will be adjusted each April with the Consumer Prices Index (CPI). If you retire on ill health grounds, the increases are paid regardless of age. If the Consumer Price index is positive, the pension will increase. If the Index is negative, there will not be a reduction in the value of your pension, but there will not be any increase applied for that year.

If you leave with less than 2 years membership and have not brought a transfer into the LGPS, you may take a refund of your contributions, less any deductions for tax. 
Note: New rules, effective only from 1 April 2014.
If you leave before retirement with over 2 years in the LGPS, you will be entitled to deferred benefits within the LGPS.
You may look into transferring the cash equivalent of your pension benefits into a new employer’s scheme if they are willing and able to accept it.