Retiring - Pay rise

Maldoon

Good Morning ...Due to retire on 5th January 2024 on a final salary pension after 29 years service , we have just been informed that we will be getting an 8% pay rise as from the 1st of January 2024 ... am I entitled to this ? will it be included in my final salary ..albeit I am retiring 4 days later 

la531983

I suspect you may have to refer to the rules of your specific pension scheme. 

GrubbyGirl_2

You're better asking your pension provider as they will all have different rules.  My final salary scheme was based on the best year of the last 3 years so the 8% pay rise wouldn't have made any difference to my pension but you should get 4 days of the 8% if it's from 1st January

Flugelhorn

GrubbyGirl_2 said:

You're better asking your pension provider as they will all have different rules.  My final salary scheme was based on the best year of the last 3 years so the 8% pay rise wouldn't have made any difference to my pension but you should get 4 days of the 8% if it's from 1st January

agree, totally down to the rules of the particular scheme, occasionally pay rises are backdated and that can have an impact

Dazed_and_C0nfused

Maldoon said:

Good Morning ...Due to retire on 5th January 2024 on a final salary pension after 29 years service , we have just been informed that we will be getting an 8% pay rise as from the 1st of January 2024 ... am I entitled to this ? will it be included in my final salary ..albeit I am retiring 4 days later 

Why wouldn't you get it?

But it will no doubt be of negligible benefit.

Maybe 4 days extra pay, depending on how your employer calculates pay in the pay period you cease employment.

And, if anything, a miniscule impact on your pension.

For example if the final 12 months is used it might be,
30,000 ÷ 365 x 361 = £29,671
Plus
32,400 ÷ 365 x 3 = £355

Final salary = £30,026

Qyburn

I think the question is whether the "final salary" that the pension relates to will or will not include that 8% increase. Is it the rate at moment of retirement, or the previous 12 months earnings? 

Flugelhorn

Qyburn said:

I think the question is whether the "final salary" that the pension relates to will or will not include that 8% increase. Is it the rate at moment of retirement, or the previous 12 months earnings? 

that is the thing and comes down to what the rules of the scheme are 

Silvertabby

Qyburn said:

I think the question is whether the "final salary" that the pension relates to will or will not include that 8% increase. Is it the rate at moment of retirement, or the previous 12 months earnings? 

Had this conversation many times in my LGPS days.  "Final Salary" meant pensionable earnings over the last 365 days (unless a previous year or best average had been used), as per Dazed's explanation.

OP will need to check his own schemes rules - but it is extremely unlikely that they will use the final pay rate instead of the final salary (yes, there is a difference!) 

RogerPensionGuy

My DB scheme uses the best two years of the last five years. 

For most people that's year 4 and 5 and divided by 2 to get the value. 

When I spoke to them they said they actually pick the 24 highest pensionable pay months inside the last 60 months and divide by 2.

Marcon

Maldoon said:

Good Morning ...Due to retire on 5th January 2024 on a final salary pension after 29 years service , we have just been informed that we will be getting an 8% pay rise as from the 1st of January 2024 ... am I entitled to this ? will it be included in my final salary ..albeit I am retiring 4 days later 

You should be entitled to the pay rise in terms of salary, but as pointed out above, whether it is included in the calculation of your pension is another matter. Some schemes use 'salary as at....[date]' as the basis for calculation, whereas others - the majority - use a longer period/averaging over a period of several years.