Final salary scheme up to 2014

ElephantBoy57

I started working for a local authority in 2006, the pension scheme was a final salary scheme up untill 2014.

So I have 18 years in that scheme and then 6 years and ongoing in the new average scheme.

My minimum hours are contracted at 30, but over the years I have worked generally above 27 hours. Is that how the final salary is worked out, so I will benefits greatly from working more hours in my final years. I am 59 now, hoping to retire in a few years.

Or will the final salary be set in 2014 or the year that I retire?

Dazed_and_C0nfused

Sorry to burst your bubble but it is only 8 years in the final salary scheme, not 18 

Final salary schemes are usually based on the full time salary.  And you only accrue say 30/38* of a year for each year you were working 30 hours.

They are often based on final (full time equivalent) salary when you retire but it's not impossible you could be classed as a deferred member and be getting an inflation increase instead.  Only your scheme rules would show this.

*substitute your hours/full time hours

Silvertabby

It's your final pensionable pay (uprated to whole time equivalent) in your last 365 days of membership.  Or a previous year if that is better/you qualify.

Note the difference in 'pensionable pay' for both pre and post 2014 service.  For the final salary portion (up to 2014) it's based on your contractual pay, and so normally excludes extras and overtime.  CARE pensionable pay, however, is usually the lot.  You only paid/pay pension contributions on actual pensionable pay.

Brynsam

ElephantBoy57 said:

My minimum hours are contracted at 30, but over the years I have worked generally above 27 hours. Is that how the final salary is worked out, so I will benefits greatly from working more hours in my final years. 

Final salary schemes (almost always) have benefits based on your whole time equivalent salary, and it is the period of pensionable service credited to you that is 'tweaked' to reflect the fact you are working/have worked part time. A numerical example might help, using some imaginary numbers purely to try and clarify:

You work for 10 years full time (5 days a week), then reduce that to 2.5 days a week for the next 10 years. Final salary benefits build up at 1/60 for each year of pensionable service. Salary is £20,000 per annum throughout (told you it was imaginary!).

Pensionable service for the full time period of employment will be based on 10 x 1/60 = 10/60ths
Pensionable service for the part time period of employment will be based on 10 x 1/60 x 2.5/5 = 5/60ths

Total pension: 10/60ths + 5/60ths = 15/60ths x £20,000 = £5,000

hyubh

ElephantBoy57 said:

I started working for a local authority in 2006, the pension scheme was a final salary scheme up untill 2014.

So I have 18 years in that scheme and then 6 years and ongoing in the new average scheme.

My minimum hours are contracted at 30, but over the years I have worked generally above 27 hours. Is that how the final salary is worked out, so I will benefits greatly from working more hours in my final years. I am 59 now, hoping to retire in a few years.

Or will the final salary be set in 2014 or the year that I retire?

To state what others have almost, but not quite said : for the LGPS specifically (and not just many final salary schemes in general), final pensionable pay used in the calculation of final salary benefits for a part timer is whole-time equivalent, not actual. The effect of part time working is instead on the 'reckonable service' side, as Brynsam explained.

Also, the final pay is in respect of when you leave active employment, not 31/03/14. Were you to leave your current job but then get another one with LGPS membership within 5 years, then aggregating memberships would establish a final pay link against your new job. Leaving and not rejoining the scheme within 5 years (or, rejoining within 5 years but then electing for separate memberships) would mean your final pensionable pay is fixed relative to the leaving date.

ElephantBoy57

Silvertabby said:

It's your final pensionable pay (uprated to whole time equivalent) in your last 365 days of membership.  Or a previous year if that is better/you qualify.
Note the difference in 'pensionable pay' for both pre and post 2014 service.  For the final salary portion (up to 2014) it's based on your contractual pay, and so normally excludes extras and overtime.  CARE pensionable pay, however, is usually the lot.  You only paid/pay pension contributions on actual pensionable pay.

I just wondered if working more hours in my final year would benefit me. Because I could end up working less.
I don't understand the 'care' section, maybe that would have become evident had I been ill, before retirement?

Silvertabby

ElephantBoy57 said:

Silvertabby said:

It's your final pensionable pay (uprated to whole time equivalent) in your last 365 days of membership.  Or a previous year if that is better/you qualify.
Note the difference in 'pensionable pay' for both pre and post 2014 service.  For the final salary portion (up to 2014) it's based on your contractual pay, and so normally excludes extras and overtime.  CARE pensionable pay, however, is usually the lot.  You only paid/pay pension contributions on actual pensionable pay.

I just wondered if working more hours in my final year would benefit me. Because I could end up working less.
I don't understand the 'care' section, maybe that would have become evident had I been ill, before retirement?

Working more hours in your final year won't affect your pre 2014 final pensionable pay, but will increase the CARE pension you accrue in that year.  So, yes, working more hours in your final year would benefit you but not as much as you may have thought.

CARE means Career Average Revalued Earnings.  Nothing to do with sickness benefits.

ElephantBoy57

Silvertabby said:

CARE means Career Average Revalued Earnings.  Nothing to do with sickness benefits.

I didn't realise that, thanks