LGPS - pension calculation
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pandora205
Posts: 2,934 Forumite
LGPS expert help please......
I am hoping to retire some time in 2019 which is the year of my state retirement age. I may be due a pay increase from September 2018 (this is a discretionary award) as well as the annual cost of living rise, which is also awarded in September. How would these calculations affect my pension, as it is not likely that I will complete a full year at my new salary level?
I'm still trying to decide which month to actually retire, so this could make a difference, though my preference will probably be before the summer.
Thanks
I am hoping to retire some time in 2019 which is the year of my state retirement age. I may be due a pay increase from September 2018 (this is a discretionary award) as well as the annual cost of living rise, which is also awarded in September. How would these calculations affect my pension, as it is not likely that I will complete a full year at my new salary level?
I'm still trying to decide which month to actually retire, so this could make a difference, though my preference will probably be before the summer.
Thanks
somewhere between Heaven and Woolworth's
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Comments
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From what year did you start work in local government ?0
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1984 plus transferred in from TPSsomewhere between Heaven and Woolworth's0
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Simply put they would increase your pension but no obvious way to work out how much by.
LGPS pension is based on Final Salary for the pre-2014 service so best estimate would be to take your salary for the 12 month's prior to retiring and use that as the base figure. Previous statements should show your length of service to use.
Post 2014 it is Career Average, so 1/49th of the last 12 months salary adjusted down to reflect the proportion of the year after 1st April i.e. Retire 30/05 get 2/12ths of 1/49th, retire 31/12 get 9/12ths of 1/49th.0 -
Are sure that your annual cost of living award is in September and not the usual April?
If it is September, then the best time to retire would be - September, as that way your pre 2014 final salary pension gets the full benefit of your double pay award.
However, if that is not possible, then your final salary for pre 2014 purposes would be your pensionable pay for:
1 July 2018 to 31 August 2018
Plus
1 September 2018 to 30 June 2019
(Assuming your date of leaving would be 30 June 2019)0 -
Thanks Silvertabby - yes I'm on Soulbury scales so that's when we get our annual rise and increments (if due). I'm not sure I can stick it out until the September though it would also suit work if I managed it!Silvertabby wrote: »Are sure that your annual cost of living award is in September and not the usual April?
If it is September, then the best time to retire would be - September, as that way your pre 2014 final salary pension gets the full benefit of your double pay award.
However, if that is not possible, then your final salary for pre 2014 purposes would be your pensionable pay for:
1 July 2018 to 31 August 2018
Plus
1 September 2018 to 30 June 2019
(Assuming your date of leaving would be 30 June 2019)somewhere between Heaven and Woolworth's0 -
Thanks - I'm registered with LGPS website so have a reasonable idea although their predictions are based on current salary rather than anticipating pay rise/increments, so will be a slight underestimate. I'm okay with the basic calculations (with a little help from a calculator) it was just how it works if there is a rise mid final year of pay that I was trying to work out.Simply put they would increase your pension but no obvious way to work out how much by.
LGPS pension is based on Final Salary for the pre-2014 service so best estimate would be to take your salary for the 12 month's prior to retiring and use that as the base figure. Previous statements should show your length of service to use.
Post 2014 it is Career Average, so 1/49th of the last 12 months salary adjusted down to reflect the proportion of the year after 1st April i.e. Retire 30/05 get 2/12ths of 1/49th, retire 31/12 get 9/12ths of 1/49th.somewhere between Heaven and Woolworth's0 -
pandora205 wrote: »Thanks - I'm registered with LGPS website so have a reasonable idea although their predictions are based on current salary rather than anticipating pay rise/increments, so will be a slight underestimate. I'm okay with the basic calculations (with a little help from a calculator) it was just how it works if there is a rise mid final year of pay that I was trying to work out.
If you get a 10% pay rise on 1 September 2018, your pre-2014 pension will go up by 10% provided you remain in service until 1 September 2019. But it will only go up 5% if you retire on 1 March 2019, say.
There can be an early retirement reduction factor applied if you go before normal pension age.No reliance should be placed on the above! Absolutely none, do you hear?0 -
If you get a 10% pay rise on 1 September 2018, your pre-2014 pension will go up by 10% provided you remain in service until 1 September 2019. But it will only go up 5% if you retire on 1 March 2019, say.
There can be an early retirement reduction factor applied if you go before normal pension age.
I wish it was likely to be 10%! Looking at current scales it would be 2% + cost of living increase (so 3ish) - still worth having. My state retirement date is March 19 and I wouldn't go before then.somewhere between Heaven and Woolworth's0
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