Final Salary Pension Statement (LGPS)

joseph80

On my latest Pension Statement there is something I don't understand in the 'Value of final salary pension benefits' section (there is also a CARE section which I do understand).

The projected annual pension is the combined amount of both 60th and 80th calculations.

"For membership built up between 1 April 2008 and 31 March 2014 you receive a pension of 1/60th of your final pay as a pension.

For membership before 1 April 2008, you receive a pension of 1/80th of your final pay plus an automatic lump sum of three times your pension."

Therefore shouldn't the maximum years for the 60ths calculation be 6?

i.e. let's say my final salary pay is £30k it would be £30,000 / 60 * 6 = £3,000

However, it shows as a total that equates to about 7.5 years service being used in the calculation (i.e. £30,000 / 60 * 7.5 = £3,750),  but I can't see how this is correct (how can it be more than 6 years)?

The only possible explanation I can think of is that it is due to the fact that that portion of my pension was transferred in in 2015 from another scheme?

Any ideas?

Dazed_and_C0nfused

If you are still a contributing member of LGPS it could simply be that it is your current salary which is used for the "final salary" element.

Does that make it look more accurate?

joseph80

Dazed_and_C0nfused said:

If you are still a contributing member of LGPS it could simply be that it is your current salary which is used for the "final salary" element.

Does that make it look more accurate?

Thank you for the suggestion - I am still a contributing member of LGPS and yes it is my current salary which is being shown and used in the calculation.

I'm just confused how they can be dividing the final salary figure by 60 and then multiplying by 7.5 years. How can they be doing the 1/60th calculation for any period over 6 years as that calculation is only applicable to the period from 01/04/2008 to 31/03/2014 or am I completely misunderstanding?

Dazed_and_C0nfused

You originally said this,

However, it shows as a total that equates to about 7.5 years service being used in the calculation (i.e. £30,000 / 60 * 7.5 = £3,750), but I can't see how this is correct (how can it be more than 6 years)?

Which I took to mean it could be 6 years x a higher salary.

Are you now saying it shows the correct current salary and it also shows 7.5 years service?

Why not just post what it actually says?

joseph80

Dazed_and_C0nfused said:

You originally said this,

However, it shows as a total that equates to about 7.5 years service being used in the calculation (i.e. £30,000 / 60 * 7.5 = £3,750), but I can't see how this is correct (how can it be more than 6 years)?

Which I took to mean it could be 6 years x a higher salary.

Are you now saying it shows the correct current salary and it also shows 7.5 years service?

Why not just post what it actually says?

Sorry for over-complicating it 

Section 4: Value of final salary pension benefits up to 31 March 2024 (payable from 05/11/45)
Final Salary Pay = £98,332 (this was my actual salary as at 31/03/2024)
Annual pension (for pre- 1 April 2014 membership): £12,260.07 Including: 60ths = £12,226.39 + 80ths = £33.68
Automatic Lump Sum = £101.03

The 80ths figure comes from an odd 10 days that were purchased from a previous Money Purchase Scheme
10/365 = 020273972 / 80 x £98,332 = £33.67

Is that slightly clearer?

Dazed_and_C0nfused

joseph80 said:

Dazed_and_C0nfused said:

You originally said this,

However, it shows as a total that equates to about 7.5 years service being used in the calculation (i.e. £30,000 / 60 * 7.5 = £3,750), but I can't see how this is correct (how can it be more than 6 years)?

Which I took to mean it could be 6 years x a higher salary.

Are you now saying it shows the correct current salary and it also shows 7.5 years service?

Why not just post what it actually says?

Sorry for over-complicating it 

Section 4: Value of final salary pension benefits up to 31 March 2024 (payable from 05/11/45)
Final Salary Pay = £98,332 (this was my actual salary as at 31/03/2024)
Annual pension (for pre- 1 April 2014 membership): £12,260.07 Including: 60ths = £12,226.39 + 80ths = £33.68
Automatic Lump Sum = £101.03

The 80ths figure comes from an odd 10 days that were purchased from a previous Money Purchase Scheme
10/365 = 020273972 / 80 x £98,332 = £33.67

Is that slightly clearer?

Yes.  @Silvertabby will no doubt be along at some point with chapter and verse but could it be you have an earlier pay period that currently qualifies as your final salary?

Something more like £122k?

https://www.lgpsmember.org/your-pension/paying-in/how-your-pension-is-worked-out/

Lemon_dr1zzle

Did your transfer accrue extra 60th service? 

joseph80

Dazed_and_C0nfused said:

joseph80 said:

Dazed_and_C0nfused said:

You originally said this,

However, it shows as a total that equates to about 7.5 years service being used in the calculation (i.e. £30,000 / 60 * 7.5 = £3,750), but I can't see how this is correct (how can it be more than 6 years)?

Which I took to mean it could be 6 years x a higher salary.

Are you now saying it shows the correct current salary and it also shows 7.5 years service?

Why not just post what it actually says?

Sorry for over-complicating it 

Section 4: Value of final salary pension benefits up to 31 March 2024 (payable from 05/11/45)
Final Salary Pay = £98,332 (this was my actual salary as at 31/03/2024)
Annual pension (for pre- 1 April 2014 membership): £12,260.07 Including: 60ths = £12,226.39 + 80ths = £33.68
Automatic Lump Sum = £101.03

The 80ths figure comes from an odd 10 days that were purchased from a previous Money Purchase Scheme
10/365 = 020273972 / 80 x £98,332 = £33.67

Is that slightly clearer?

Yes.  @Silvertabby will no doubt be along at some point with chapter and verse but could it be you have an earlier pay period that currently qualifies as your final salary?

Something more like £122k?

https://www.lgpsmember.org/your-pension/paying-in/how-your-pension-is-worked-out/

Thank you. Good suggestion, but I have never earned more than my current salary so it can't be based on anything higher. 

joseph80

Lemon_dr1zzle said:

Did your transfer accrue extra 60th service? 

Trying to dig out the relevant paperwork, but I'm thinking perhaps yes that is the answer. Would that make sense if so? I hope so and that it is not an error that will come out in the wash further down the line!

Silvertabby

A transfer in, giving extra 60th service, is the most likely explanation.

Nebulous2

I transferred from an English LGPS to a Scottish one during the period of the 60ths pension and ended up with over 30 years in a scheme which only ran for 6 years. 

Whether I should have or not is a different story, but in some ways it suited me, as I wanted to maximise pension rather than lump sum, and I lost the previous automatic lump sum.