What is PI on Basic Pension (Local Govt)

onesixfive

Can somebody please explain the "split" in my Local Govt pension please?
Forgive my naivety, but I've only recently had time to delve into my pensions in any detail. I retired (in a hurry), in July 2018.
I get a Local Govt Pension amount each month, which is shown on the payslip as around two-thirds "Basic Pension", and one-third "PI on Basic Pension".
What is PI ?? & Why is it split like this?
I've noticed that the larger Basic Pension never changes year-on-year. Only the smaller PI amount increases (slightly) yearly in April.
Is it the smaller PI amount on which the annual % rate rise is based? or the whole amount?


I wont get state pension for some years yet. (I'm also chasing some contracted-out shortfalls on my state pension - separate matter!, this is what's caused me to look more carefully at my current income)...!

Silvertabby

It's the total amount.  After the April increase has been applied (10 April this year) your total pension will increase by 10.1%, but your records will still show the original basic pension and the (increased) PI.  It's just the way the LGPS do things.

hyubh

onesixfive said:

Can somebody please explain the "split" in my Local Govt pension please?
Forgive my naivety, but I've only recently had time to delve into my pensions in any detail. I retired (in a hurry), in July 2018.
I get a Local Govt Pension amount each month, which is shown on the payslip as around two-thirds "Basic Pension", and one-third "PI on Basic Pension".
What is PI ?? & Why is it split like this?
I've noticed that the larger Basic Pension never changes year-on-year. Only the smaller PI amount increases (slightly) yearly in April.
Is it the smaller PI amount on which the annual % rate rise is based? or the whole amount?


I wont get state pension for some years yet. (I'm also chasing some contracted-out shortfalls on my state pension - separate matter!, this is what's caused me to look more carefully at my current income)...!

The particular pensions admin software the administrator uses records exactly per the legislation for the scheme. So you have your basic pension at exit (typically), with 'pension increase' (PI) in addition thereafter which is technically recalculated from scratch each year, even though it's usually communicated as being a year-on-year thing (since, in practice, it is).

The more common way to record - outside of the LGPS and other public sector scheme administrators who use this particular software - is to have the opening amount increased each year. So assuming there were no additional splits, the 'basic' amount would gradually rise and there wouldn't be a separate PI amount. It should all come down to the same thing however. In fact, were your LGPS administrator to change software suppliers, it would be quite possible that the recording style would switch too.