LGPS Final salary calculation

Mikey481

I have looked through all the guides and scheme documents for LGPS but unable to find an answer to my query hoping someone can help.
My wife has dropped a day per week from September 1st so she is trying to work out how long she can work on lower hours before it has an impact on the genuine Final salary element of her pension. Is it best of last three for instance she is 60 in January and has 22 years in the scheme so I guess it’s membership before 2008 ? Thanks in advance.

hyubh

Mikey481 said:

I have looked through all the guides and scheme documents for LGPS but unable to find an answer to my query hoping someone can help.
My wife has dropped a day per week from September 1st so she is trying to work out how long she can work on lower hours before it has an impact on the genuine Final salary element of her pension.

If her rate of pay hasn't changed, then... 'forever', given pensionable pay for final salary service is the whole time equivalent amount not the actual one.

Is it best of last three for instance she is 60 in January and has 22 years in the scheme so I guess it’s membership before 2008 ?

Service up until April 2008 = final salary, 1/80 pension and 3/80 automatic lump sum. Service from 01/04/08-31/03/14 or 01/04/08-31/03/22 (*) = final salary, 1/60 pension and no automatic lump sum.

(*) Under McCloud, 1/4/14-31/3/22 will be the better of the 2008 and 2014 schemes. Clearly 1/49 CARE still has a chance of beating 1/60 final salary even with the later normal pension age (SPA vs. 65).

Mikey481

Thanks for the information so your saying that pre 2008 service is not directly linked to your best years

Mikey481

Sorry that should read best years salary thanks

hyubh

Mikey481 said:

Thanks for the information so your saying that pre 2008 service is not directly linked to your best years

No, that's not what I said. Pre-2008 and 2008-2014 pension uses the same final salary figure. But this figure is not affected by dropping a day per week, since it's the whole time equivalent salary that is used.

More specifically, typically the average whole time equivalent salary of the final 12 months is used. However, if the average of either the penultimate year or the third from last is higher, in nominal terms, then that should be used instead (with the chosen figure then uplifted for inflation to date of exit - note this uplifting is done only after the test for being 'best' has been done, not before). But, as said, simply going from full time to part time won't make this relevant, since that doesn't affect your whole time equivalent salary.

Mikey481

Thanks for the clarification