Clarify "best year of last three" regarding final salary pension

76zedfour

I am in a final salary pension and had always assumed the best of the last 3 years was the best floating 365 day period within the last 3 years.
I have just read this from a work pension document which casts doubt on this assumption;
"What pay is used to calculate retirement benefits?
In most cases this will be your pensionable pay averaged over the last 365 days of pensionable
service.
If either of the two preceding periods of 365 days would produce a greater amount, the
final pensionable pay from one of those earlier periods could be substituted (known as best
of the last three years).
Could one of you friendly pension experts familiar with this form of phrasing confirm my worst fears or is this generally taken ambiguously. I ask this because I have been offered a 12 month posting at enhanced salary and it starts 31 months before my preferred retirement date.

I have asked my pension provider by email but expect an answer within the month going by any previous correspondence.

LXdaddy

Seems fairly clear to me - the last 365 days or the previous 365 days or the previous 365. Not "the best 365 consecutive days in the last 1095 days"

kidmugsy

If the "enhancement" is big enough, adjust your retirement date to exploit it to the full.

76zedfour

Yes, it does look pretty clear. I was kind of hoping a pension adviser who sees this term all the time might say its commonly accepted as a floating start date but that would be hopeful. Guess I will have to work 5 months longer to maximise the benefit.

System

Hi

Not sure what scheme you are in, so what I post may be totally wrong...
http://www.lgps2014.org/content/final-pay


Your final year’s pay when you leave the LGPS will still be used to work out your benefits built up before 1 April 2014. This means that any future pay increases will be included in the final pay used to work out these benefits.
The definition of final pay for benefits built up before April 2014 remains the same as it was before the Scheme changed. Your final pay is normally the pay in respect of your final year of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher. This remains so from April 2014.
In addition if your pay is reduced, or increases to your pay are restricted in your last 10 years of continuous employment with your employer, you continue to have the option to have all your pre April 2014 membership based on the average of any 3 consecutive years’ pay in the last 13 years (ending on a 31 March).
If you have a certificate of protection which was issued by your employer for a reduction or restriction in pay beyond your control before 1 April 2008 and you leave the LGPS within 10 years of the reduction or restriction, then this protection continues to apply after April 2014 for benefits built up in the final salary scheme.








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Please note you cannot take your benefits built up to April 2014 separately from the benefits you build up from April 2014, the only exception to this is if you take flexible retirement. All of your pension would have to be drawn at the same time if retiring voluntarily. Also ‘Rule of 85’ protections, which some members have, will continue to apply in the new scheme. Please see the section, ‘Paying in before April 2014’ for more information on protections.

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So ask about Flexible Retirement, it may be to your benefit and whether the Average rule applies to you/your scheme.

hyubh

johndough wrote: »

Not sure what scheme you are in

Googling the text quoted suggests Firefighters (FPS/NFPS):

http://www.sppa.gov.uk/index.php?option=com_content&view=article&id=92&Itemid=303

https://www.oxfordshire.gov.uk/cms/sites/default/files/folders/documents/fireandpublicsafety/recruitment/FPSGUIDE.pdf

highet

as i understand it its usually the 12 months preceding your retirement date , the 12 months before that and the 12 months before that and you cant pick and choose which 12 month period you want to use - hence advice i have received - if getting any uplift in salary make sure you dont retire until it has been in payment for 12 months to make sure the whole uplift is counted when working out your pension

System

Hi

It is the employers responsibility to forward the Leaving Date from the scheme, and a reason EG: Retirement, along with the correct pay figures.

As this doesn't always happen the scheme admin sometimes notices, as may the employee, and request a revised amount.

It is 365 days, split where needed to include different pay scales. 130/365 @ £33,333.00 225/365@ £28,888.00 giving a figure of £11,872.03 + £17,807.67 = £29,679.70