Salary Reduction - Effect on LGPS Pension Salary?

FredTheFifth

My pension salary is made up of three calculations based on 60th's and 80th's of a projected final salary and a CARE element. If my job gets made redundant but I am offered another job on a lower salary I can see that the CARE element would reduce in my projected normal retirement age salary, but can anyone advise what happens to the salary based on the 60th's and 80th's please? Ie is the originalprojected higher salary "locked in" to that calculation or does it change to the reduced salary of the job I move to?

Kynthia

I dont know the lgps but in a similar scheme it would mean the final salary in all your calculations would be lower. If you had breaks in service and the pension from the previous service hadn't been linked to your current service so it has a final salary already locked in, then that might not be the case but you would probably know that already if it applied to you.

There is possibly some protection due to being downgraded as part of a redundancy process, rather than taking a lower paid job through choice. Can you asked your pension administrator?

GunJack

Calling Silvertabby

Silvertabby

It depends. If you are within 10 years of your normal retirement age (State pension age) when your salary drops, then your records will probably be 'run on'.

Your CARE element will indeed be lower, as a result of your lower pay, but your pre 2014 final salary elements will be calculated either using your salary as at your eventual date of leaving, or your best year's pay. This is either the best of your last 3 years, or the best average 3 year period over 13 years.

If you have more than 10 years to go then you may find that your pension records up to the date of the pay drop will be preserved, and you will have a separate record for your new CARE only element.

However, I would check how your LGPS provider will play this as part of your redundancy planning - different schemes can and do have different policies