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  • FIRST POST
    • mbeamethyst
    • By mbeamethyst 19th Mar 17, 5:17 PM
    • 57Posts
    • 28Thanks
    mbeamethyst
    Pension Statements - Part-Time Worker
    • #1
    • 19th Mar 17, 5:17 PM
    Pension Statements - Part-Time Worker 19th Mar 17 at 5:17 PM
    Hi,

    Should Pensionable Earnings for someone who works part-time be their actual annual salary or should it be the salary they woild earn if they were full-time?

    Simple e.g. If the full- time salary = £30,000 and part-time salary (50% hours worked) = £15,000, which one is applicable for Pensionable Earnings on a Pension Benefit Statement?

    Sorry if this is a stupid question, but it's causing a domestic!
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Page 1
    • sandsy
    • By sandsy 19th Mar 17, 5:25 PM
    • 1,050 Posts
    • 602 Thanks
    sandsy
    • #2
    • 19th Mar 17, 5:25 PM
    • #2
    • 19th Mar 17, 5:25 PM
    I work part-time. My pensionable earnings are my part-time salary.
    • mbeamethyst
    • By mbeamethyst 19th Mar 17, 5:30 PM
    • 57 Posts
    • 28 Thanks
    mbeamethyst
    • #3
    • 19th Mar 17, 5:30 PM
    • #3
    • 19th Mar 17, 5:30 PM
    Thanks Sandsy that's what I thought it was supposed to be.
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    Learn from the mistakes of others - you won't live long enough to make them all yourself.
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    • Silvertabby
    • By Silvertabby 19th Mar 17, 5:54 PM
    • 793 Posts
    • 848 Thanks
    Silvertabby
    • #4
    • 19th Mar 17, 5:54 PM
    • #4
    • 19th Mar 17, 5:54 PM
    It depends on the pension scheme. The LGPS, for example, is now a career average scheme - but pre 2014 benefits still have the final salary link. In this case, the pensionable pay is the whole time equivalent - it's the service that's pro-rated.

    In your example, £30K would be the pensionable pay - but the service accrued would only be 6 months, instead of 12 months.
    • Kynthia
    • By Kynthia 19th Mar 17, 6:35 PM
    • 4,791 Posts
    • 6,786 Thanks
    Kynthia
    • #5
    • 19th Mar 17, 6:35 PM
    • #5
    • 19th Mar 17, 6:35 PM
    In my scheme the pensionable earnings figure used to calculate your pension can change depending on what scheme you are in. Some earnings over the 12 months might not all be pensionable, such as some allowances and part of overtime.this can confuse people when tge figure doesn't match their published salary or the taxable income on their p60.

    To put it simply though, in the final salary scheme they use the full time equivalent earnings and it's the reckonable service that is reduced to reflect the fact you are part time.

    In the career average scheme there is no reckonable service. The scheme works by calculating a percentage of your actual pensionable earnings each year and giving you that as a pension. So your actual part time earnings are used.
    Don't listen to me, I'm no expert!
    • mbeamethyst
    • By mbeamethyst 19th Mar 17, 8:59 PM
    • 57 Posts
    • 28 Thanks
    mbeamethyst
    • #6
    • 19th Mar 17, 8:59 PM
    • #6
    • 19th Mar 17, 8:59 PM
    Thanks for the replies Silvertabby and Kynthia. I should have figured that it probably wasn't going to be as simple as one figure or the other being what is used for the calculations. The scheme is similar to the LGPS in that it was FS then moved to career average, so now I can understand why the FTE salary is quoted. I was concerned that it was being calculated wrongly because it didn't show the P/T salary as pensionable earnings, but it makes sense now.

    Thanks for the clarification.
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    Learn from the mistakes of others - you won't live long enough to make them all yourself.
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