Council retirement - backdated pay & pension

moneysavingnovice999

I retired in 2021 and my council pension was calculated based on my earnings for the previous 12 months.  But I was very surprised to be told by my old employers that they don't automatically pay a backdated lump-sum due in respect of the pay award made for that year - I had to apply for it.  Maybe other recent pensioners are not aware that they can claim this, and once it is paid they can claim from their pension scheme a lump-sum for the backdated pension increase (arising from recalculation of their earnings in their final year), and an increased pension going forward.  Nowadays, when every penny counts (especially for pensioners), I feel this needs to be brought to wider attention.   Any comments, anyone?

DavidBowie

I am really interested in the answer to this too as I am about to retire and this has implications for how much I am paid (I think).

moneysavingnovice999

According to my payroll contact at the council, this is correct, so I suggest you check with your payroll people.  I understand I will receive a lump-sum from the council for backdated pay increase, and when they inform the pension fund about this, the latter will pay a further lump-sum for backdated pension increase due to recalculated annual earnings, together with an increase in pension going forward.  According to my calculations a few hundred pounds in lump-sums, and about £20 pcm in pension.  Not a lot, but better than nothing.  Every little helps, these days!

Lemon_dr1zzle

Your pension provider is completely separate to your old employer. They don’t have a crystal ball so will be unaware if you have had a pay award.
If you have tell you employer to provide the revised pay information and they will recalculate the benefits. The pension team aren’t trying to do you out of money.  

Silvertabby

Lemon_dr1zzle said:

Your pension provider is completely separate to your old employer. They don’t have a crystal ball so will be unaware if you have had a pay award.
If you have tell you employer to provide the revised pay information and they will recalculate the benefits. The pension team aren’t trying to do you out of money.  

It's always been the case that employers had their own policies, and that the LGPS didn't know/couldn't do anything until the employer had issued revised final leaver details.

Won't be so much of an issue now, with CARE, but back in the day of final salary calculations based on a previous/best year figure, this could lead to some rather difficult conversations...

Pensioner:  Hello, I retired 6 months ago but have just received back dated pay arrears from which I paid pension contributions.  How much more will my pension be, and when will you pay me my money?

Me:  Your pension was calculated on a previous/best year's figure, which is still higher than your revised final salary, so there are no pension arrears due.

Pensioner:  But - but - they took £X pension contributions from my arrears.  That must increase my pension - put me on to someone who knows what they are talking about.