LGPS Rule of 85 question

System

Hi

I think this is a little more complex than a "Rule of 85" situation.

It is the employers responsibility to ensure that the correct salary is given to the administrators, whether that is the 'Best of the Last 3' or the " 3 Best Averages of the Last 10 (adjusted accordingly)".

What jars slightly is the opt out 31/08/14, which is only a few months after the CARE started. Is there not a deferred 80ths and 60ths from 31/03/14 which would have been linked to a salary?

Hence the references above to building up the final salary after the reduction.

What is crucial is to get, either the leaving paperwork for 31/08/14 for scrutiny, and or an Annual Benefit Statement for the deferred service to see the Salary used in the calculations.

As indicated above the hope is that the Index Linking will give / protect the value of the deferred benefit compared to the CARE element.

Hypothetical values.

5 years at 1/60 compared to 5 years at 1/49 is 8.333% to 10.204% respectively. This suggests that the pension earned will be almost 22.5% more under the CARE scheme, which is some small comfort against the salary loss.

jem16

johndough wrote: »

Hi

I think this is a little more complex than a "Rule of 85" situation.

It is the employers responsibility to ensure that the correct salary is given to the administrators, whether that is the 'Best of the Last 3' or the " 3 Best Averages of the Last 10 (adjusted accordingly)".

What jars slightly is the opt out 31/08/14, which is only a few months after the CARE started. Is there not a deferred 80ths and 60ths from 31/03/14 which would have been linked to a salary?

Presumably it would have been CARE from 1/4/14 till 31/08/14 so 1/49ths?

What is crucial is to get, either the leaving paperwork for 31/08/14 for scrutiny, and or an Annual Benefit Statement for the deferred service to see the Salary used in the calculations.

From what I understand, the employer has now calculated the two options and provided figures to see whether it's best to amalgamate the two periods or not. As it appears very unlikely that the previous pay grade would be restored the figures come out best for not amalgamating the two periods.

What was really the question was how it would affect, if at all, the Rule of 85 situation. It appears from what has been said that it will not make any difference.

Silvertabby

From what I understand, the employer has now calculated the two options and provided figures to see whether it's best to amalgamate the two periods or not. As it appears very unlikely that the previous pay grade would be restored the figures come out best for not amalgamating the two periods.

Sounds reasonable. As the split is near enough the point the scheme switched from final salary to CARE only the chance of restoration to the previous pay grade (or higher) would really benefit the final calculations. The deferred benefits will now increase by CPI until they are drawn.

Silvertabby

What jars slightly is the opt out 31/08/14, which is only a few months after the CARE started. Is there not a deferred 80ths and 60ths from 31/03/14 which would have been linked to a salary?

Yes - the record was deferred as at 31/08/14, with service from 01/04/2014 being accrued on a CARE basis. Only service to 31/03/2014 is calculated on a final salary/best pay basis.

OP's example is a little unusual, but let's say someone else had their records combined thus :

1995 to 31/03/2014 = final salary/best year if applicable

01/04/2014 - date of leaving = CARE

As at the date of leaving, the pension would be calculated based on the FS/CARE split - with the final salary/best pay figure for the pre 2014 service being the old rules pay figures at the date of leaving.