This requires a calculation to be carried out by your employer to determine what your pay would have been for the period when you were on reduced contractual pay or no pay due to sickness or the period of relevant child related leave or reserve forces service leave.
This is the earlier of:
- the day you reach age 22 provided you are earning more than £10,000 (2014/15 figure) a year in the job, or
- the beginning of the pay period in which you first earn more than £10,000 (2014/15 figure) in the job, on an annualised basis, provided you are aged 22 or more and under State Pension Age at that time.
A person who will receive some form of benefit payment from the scheme once certain events come to pass e.g. a spouse's pension payable on the death of an existing scheme member.
An independent body which administers the State Pension Scheme. Any worker in the UK can become entitled to a State Pension, whereas only people who have worked in Local Government (and paid into the LGPS) are entitled to an LGPS pension. The Benefits Agency administers the State Pension Scheme, Local Authorities (eg Buckinghamshire County Council, Bedfordshire County Council, etc) are only responsible for the LGPS. See also Department for Work and Pensions.
While it is not possible for us to make a guaranteed prediction of your benefits at retirement age, we can produce estimates which will give you a rough idea of what your pension is likely to be. The nearer you are to retirement age, the more accurate your estimate is likely to be. Generally speaking, we provide estimates (on request) showing benefits at the age of 60 or 65, although you can stipulate an alternative date if you wish.
Legislation bought in by the Government in an attempt to make local authorities more accountable for their actions and expenditure. By conducting reviews of their individual departments, local authorities are expected to streamline services and ensure that the public they serve are receiving good 'value for money'.
CEP (Contributions Equivalent Premium)
When a scheme member leaves the LGPS and opts for a refund of their contributions, a sum of money (the CEP) is payable to the DWP to cover the cost of reinstating the member into S2P (State Second Pension), formerly SERPS (State Earnings Related Pension Scheme).
Certificate of protection
Certificates of Protection of Pension Benefits were intended to protect, for a period of up to 10 years, pension rights accrued by a scheme member who had been forced to accept a lower rate of pay or whose pay had been restricted.
Club transfer rules
A civil partnership is a relationship between two people of the same sex (‘civil partners’) which is formed when they register as civil partners of each other.
Club transfer rules allow certain final salary occupational pension schemes, mainly public service pension schemes, to calculate transfers on a special terms. Transfers into the LGPS, including final salary membership from other public sector club transfer schemes (usually membership up to 31 March 2015), or transfers out of the LGPS to other public sector club schemes (including final salary membership built up before 1 April 2014), provide benefits that are broadly equivalent across both schemes. Provided there is not a continuous break in active membership of a public service pension scheme of more than 5 years, any final salary membership transferred would purchase a period of membership and retain a final salary link . The Pensions & Investments Team will provide you with further information on club transfers should this apply to you.
Consumer Prices Index (CPI)
The Consumer Price Index (CPI) is the official measure of inflation of consumer prices in the United Kingdom. This is currently the measure used to adjust your pension account at the end of every scheme year when you are an active member of the scheme and, after you have ceased to be an active member, it is used to increase (each April) the value of your deferred pension in the scheme and any pension in payment from the scheme. The adjustment ensures your pension keeps up with the cost of living.
The LGPS was contracted out of the State Earning Related Pension Scheme (SERPS) and is contracted out of the State Second Pension (S2P). This means that, prior to State Pension Age, you pay reduced National Insurance contributions between the Lower Earnings Limit and the Upper Accruals Point (unless you have opted to pay the married woman’s/widow’s reduced rate of National Insurance). The LGPS guarantees to pay you a Guaranteed Minimum Pension (GMP) for being contracted out of the State Earning Related Pension Scheme (SERPS) and, for membership after 5 April 1997, the LGPS must meet a minimum Reference Scheme test prescribed under the Pensions Act 1995.
From April 2016 the Government plans to remove the reduction in National Insurance contributions for all contracted out pension schemes, but full details on how this will work have yet to be finalised.
A regular amount of money paid into a pension scheme in order to guarantee you a pension at the end of your working career. Contributions into the LGPS will be between 5.5% and 12.5% of your actual pensionable pay and will be shown on your monthly/weekly pay slip. Higher contribution rates can be arranged through AVC or FSAVC plans.
A member who leaves the scheme with more than 3 months service (and hence becomes entitled to Deferred Benefits) is known as a Deferred Member. The member is not allowed to continue paying into the LGPS after leaving local government employment (unless they commence work with another authority offering the LGPS at a later date).
Department for Communities and Local Government (DCLG) (previously the Office of the Deputy Prime Minister)
The DCLG's primary interest is in working towards improving delivery and value for money from services offered by local authorities. It takes an active role in planning and implementing various programmes, with the co-operation of local authorities, in order to ensure local government works as efficiently as possible. For further information, please visit the DCLG website.
Department for Work and Pensions (DWP)
An independent body which administers the State Pension Scheme. Any worker in the UK can become entitled to a State Pension, whereas only people who have worked in Local Government (and paid into the LGPS) are entitled to an LGPS pension. The Benefits Agency administers the State Pension Scheme, Local Authorities (eg Buckinghamshire County Council, Bedfordshire County Council, etc) are only responsible for the LGPS. (See also Benefits Agency).
This is the power given by the DCLG to enable your employer or your administering authority to choose how they will apply the Scheme in respect of certain of its provisions. Under the LGPS your employer or your administering authority are obliged to consider certain of these discretionary provisions and to pass resolutions to form a policy of how they will apply the provision. In respect of the remaining discretionary provisions they are advised to do so. They have a responsibility to act with prudence and propriety in formulating their policies and must keep them under review. You may ask your employer or your administering authority what their policy is in relation to a discretion.
A member of the scheme who leaves before pension benefits are brought into payment, normally becoming entitled to preserved/deferred benefits.
A member who leaves the scheme, with immediate entitlement to benefits, before their normal pension age (NPA).
If you joined the scheme on or after 1st June 1989, the earnings cap was the maximum pay that you could pay contributions on and upon which your benefits can be calculated. The figure was reviewed annually by the Government and increased in line with the Retail Prices Index and the final Earnings Cap for 2005/6 was £105,600. Please note that the Earnings Cap has ceased due to the new lifetime allowance limits introduced in the April 2006 regulations.
Eighty-five year rule
This was a method by which scheme members were allowed to retire early (rarely earlier than 60) and without a percentage reduction, if their age and total membership in the scheme totalled 85 years or more. It was withdrawn from the LGPS on 1st October 2006.
Eligible children are your children. They must, at the date of your death:
- be your natural child (who must be born within 12 months of your death), or
- be your adopted child, or
- be your step-child or a child accepted by you as being a member of your family (this doesn’t include a child you sponsor for charity) and be dependent on you.
Eligible children must meet the following conditions:
Eligible cohabiting partner
- be under age 18, or
- be aged 18 or over and under 23 and in full-time education or vocational training (although The Pensions & Investments Team can continue to treat the child as an eligible child notwithstanding a break in full-time education or vocational training), or
- be unable to engage in gainful employment because of physical or mental impairment and either:
- has not reached the age of 23, or
- the impairment is, in the opinion of an independent registered medical practitioner, likely to be permanent and the child was dependent on you at the date of your death because of that mental or physical impairment.
An eligible cohabiting partner is a partner you are living with who, at the date of your death, has met all of the following conditions for a continuous period of at least 2 years:
- you and your cohabiting partner are, and have been, free to marry each other or enter into a civil partnership with each other, and
- you and your cohabiting partner have been living together as if you were husband and wife, or civil partners, and
- neither you or your cohabiting partner have been living with someone else as if you/they were husband and wife or civil partners, and
- either your cohabiting partner is, and has been, financially dependent on you or you are, and have been, financially interdependent on each other.
Your partner is financially dependent on you if you have the highest income. Financially interdependent means that you rely on your joint finances to support your standard of living. It doesn’t mean that you need to be contributing equally. For example, if your partner’s income is a lot more than yours, he or she may pay the mortgage and most of the bills, and you may pay for the weekly shopping.
On your death, a survivor’s pension would be paid to your cohabiting partner if:
- all of the above criteria apply at the date of your death, and
- your cohabiting partner satisfies The Pensions & Investments Team that the above conditions had been met for a continuous period of at least 2 years immediately prior to your death.
You are not required to complete a form to nominate a cohabiting partner for entitlement to a cohabiting partner’s pension. However, you can provide the Pensions & Investments Team with your cohabiting partner’s details. We will require evidence upon your death to check that the conditions for a cohabiting partner's pension are met.
An eligible jobholder is a worker who is aged a least 22 and under State Pension Age and who earns more than the annual amount of £10,000 (2014/15 figure).
This is usually the pay in respect of (i.e. due for) your final year of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher, and includes your normal pay, contractual shift allowance, bonus, contractual overtime (but not non-contractual overtime), Maternity Pay, Paternity Pay, Adoption Pay, and any other taxable benefit specified in your contract as being pensionable.
If you were part-time for all or part of the final year the whole-time pay that you would have received if you had worked whole-time is used and if your pay in your final year was reduced because of sickness or relevant child related leave, final pay is the pay you would have received had you not been on sick leave or relevant child related leave.
FSAVC (Free Standing Additional Voluntary Contributions)
This allows you to start receiving some or all of their benefits from an earlier age (i.e. 55 years and over), yet continue working for their employer for several more years in exchange for reducing their hours and/or grade/scale point. Scheme members MUST have their employers consent in order to 'retire' in this manner. Please contact your employer’s Human Resources department and ask them for details of their Flexible Retirement policy.
As opposed to an in-house AVC scheme (organised through our in-house providers; Clerical Medical and Prudential), a FSAVC is an arrangement you make independently of us with a pension provider of your choosing. Once you retire, you can use the contributions paid into your FSAVC to purchase extra pension from a provider of your choice. Note: you will only be able to buy this pension from us if you are paying into the in-house scheme.
Guaranteed minimum pension (GMP)
In agreeing to contract-out of S2P/SERPS, an employer must agree to guarantee a second pension of at least equivalent value had the member stayed paying into S2P/SERPS. This is the minimum pension that the LGPS must pay you, had you been a member of the LGPS on and between 6th April 1978 and 5th April 1997.
Ill health early retirement
A scheme member can retire from their employment if their illness prohibits them from permanently completing their employment duties. Ill health retirement will only apply to those cases where an Independent Registered Medical Practitioner qualified in occupational health has agreed that the member cannot return to their duties. In the event that the retirement is agreed upon, all of the usual restrictions to retirement (age, pensionable service etc) are removed.
The AVC scheme provided by an occupational pension scheme. Our current providers are Clerical Medical and Prudential.
This refers to a scheme member who works up to, and beyond, their normal retirement age. They will be eligible for benefit payments immediately, once the decision to leave their existing employment has been made. Members can remain in the LGPS up to age 75.
Local Government Association (LGA)
The LGA's primary function is to act as the representative for all of the local authority pension funds within the United Kingdom, particularly in their dealings with the DCLG. For further information, please visit the DCLG website.
Local Government Pension Scheme (LGPS)
The occupational pension scheme available to all local government employees in England and Wales, including those employees who are entitled to join the pension fund under an admission agreement agreed with the local administering authority. It includes civilian members of Police and Fire Authorities and support staff at further education establishments, but NOT uniformed officers or teachers.
An employee of the County Council, District Councils, Unitary Authority and/or Admitted Bodies who, at some stage in their working career, has been a member of the Local Government Pension Scheme. A person (usually an active member) who is in a pension scheme and is entitled to benefits under the scheme.
Nominated cohabiting partners
Normal Pension Age
A Nominated Cohabiting Partner is a partner on whom financial dependency or interdependency can be proven for at least two years. To be eligible for nominated partner status, both cohabiting partners must be free to marry/register their civil partnership.
Normal Pension Age is linked to your State Pension Age for benefits built up from April 2014 (but with a minimum of age 65) and is the age at which you can take the pension you have built up in full. If you choose to take your pension before your Normal Pension Age it will normally be reduced, as it's being paid earlier. If you take it later than your Normal Pension Age it's increased because it's being paid later.
You can use the Government’s State Pension Age calculator (www.gov.uk/calculate-state-pension
) to find out your State Pension Age. Please note that this calculator does not include proposed changes to State Pension Age.
Remember that your State Pension Age may change in the future and this would also change your Normal Pension Age in the LGPS for benefits built up from April 2014. Once you start drawing your pension any subsequent change to your State Pension Age will not affect your Normal Pension Age in the LGPS.
If you were paying into the LGPS before 1 April 2014 your final salary benefits retain their protected Normal Pension Age - which for most is age 65. However all pension benefits drawn on normal retirement must be taken at the same date i.e. you cannot separately draw your final salary benefits (built up before April 2014) at age 65 and your benefits in your pension account (built up from April 2014) at your Normal Pension Age (which for your benefits built up from April 2014 is linked to your State Pension Age but with a minimum of age 65).
Occupational pension scheme
A pension scheme to which only employees of a particular company or related group of employers is eligible to contribute. As soon as the employee leaves the employer, they will no longer be eligible to pay into the pension scheme.
Each scheme year the amount of pension you have built up during the year is worked out and this amount is added into your active pension account. Adjustments may be made to your account during the scheme year to take account of any transfer of pension rights into the account during the year, any additional pension you may have decided to purchase during the year or which is granted to you by your employer, any reduction due to a Pension Sharing Order or qualifying agreement in Scotland (following a divorce or dissolution of a civil partnership) and any reduction due to an Annual Allowance tax charge that you have asked the scheme to pay on your behalf. Your account is then revalued to take account of the cost of living. This adjustment is carried out in line with the Treasury Revaluation Order index which, currently, is the rate of the Consumer Prices Index (CPI).
You will have a separate pension account for each employment. That pension account will hold the entire pension built-up for that employment.
In addition to an active member’s pension account there are also:
- a deferred member’s pension account;
- a deferred refund account;
- a retirement pension account;
- a flexible retirement pension account;
- a deferred pensioner member’s account;
- a pension credit account; and
- a survivor member’s account.
These accounts will be adjusted by any debits for any Pension Sharing Order or qualifying agreement in Scotland (following a divorce or dissolution of a civil partnership) and for any Annual Allowance tax charge that you have asked the scheme to pay on your behalf. These accounts are currently increased each April in line with the Consumer Prices Index (CPI).
The pay on which you normally pay contributions is your normal salary or wages plus any shift allowance, bonuses, overtime (both contractual and non-contractual), Maternity Pay, Paternity Pay, Adoption Pay and any other taxable benefit specified in your contract as being pensionable.
You do not pay contributions on any travelling or subsistence allowances, pay in lieu of notice, pay in lieu of loss of holidays, any payment as an inducement not to leave before the payment is made, any award of compensation (other than payment representing arrears of pay) made for the purpose of achieving equal pay, pay relating to loss of future pensionable payments or benefits, any pay paid by your employer if you go on reserve forces service leave nor (apart from some historical cases) the monetary value of a car or pay received in lieu of a car.
This can be accrued by working for the County Council, Local Authorities or Admitted Bodies in a non-teaching capacity. The period of time you pay into the LGPS, whilst working in Local Government, is known as your Pensionable Service (See also total membership ).
This is a figure applied annually (every April) to all active pensions paid by our pensioner payroll. It is a figure intended to offset the cost of living inflation, so in effect it preserves the value of a pension throughout its time in payment. Pensioners who have not been on pension for 1 full year or people retiring under the age of 55 (bar ill-health) do not qualify for the increase straight away. Rates can be found on our pensioner pages.
The Pensions Ombudsman is responsible for investigating complaints and settling disputes which can arise between scheme administrators and scheme members. Pension schemes must follow the Ombudsman’s rulings, but scheme administrators are allowed to challenge the rulings in court if they so wish. Visit the Pensions Ombudsman website for further information.
Personal pension plan
This is an individual pension arrangement between a person and a financial company of their choosing. They generally offer a more flexible approach to pension contributions, whereas an occupational scheme is more geared towards accommodating a particular type of contributor/employee.
If you leave your local government employment with over 2 years pensionable service, you will become entitled to a 'Preserved Benefit' (sometimes referred to as 'Deferred Benefits'). You will receive a monthly pension (and, depending on when you stopped contributing to the LGPS, a one-off tax free lump-sum) from this preserved benefit when you reach normal retirement age (or earlier, depending on circumstances). If you would rather not receive a pension from the Buckinghamshire County Council pension fund, you may elect to transfer your preserved benefit to another pension scheme (either another occupational scheme or a private pension).
The lowest amount of benefits that a Contracted-Out Money Purchase Scheme (COMPS) can pay to a member. The amount is worked out by using the money purchase method, with minimum contributions or minimum payments making up the payments to the fund.
This is a statement that your employer and your administering authority must produce, setting out the policies that they have resolved to follow in exercising certain discretions under the LGPS. Other discretions may also be included. You should be notified of the policies contained on the Statement and where changes are made, you should be notified within one month of the change occurring. You may ask your employer and your administering authority for the latest copy of their Policy Statements.
A period of service accrued in a previous employment, which, although not actually transferred to the new pensionable employment, does provide the scheme member with additional benefits (most notably in meeting membership dependant criteria such as the ’85-Year Rule’). The service itself does NOT contribute towards pension benefits accrued on this new employment. The majority of Qualifying Service is collected from previous Local Government employments.
Relevant Child Related Leave
Relevant child related leave includes periods of Ordinary Maternity, Adoption or Paternity Leave (normally first 26 weeks) and any periods of paid Additional Maternity, Adoption or Paternity Leave (normally after week 26 weeks up week 39).
Reserve Forces Service Leave
In the case of the LGPS, a persons pensionable remuneration is their last 365 days pay (certain payments are pensionable, others aren't - if in doubt, check with your payroll department). Please note, your pensionable remuneration will almost certainly be different (in most cases, lower) to your salary scale point, due to the final 365 days (for the majority) straddling two financial years.
This occurs when a Reservist is mobilised and called upon to take part in military operations. The period of mobilisation can range from three months or less and up to a maximum of 12 months. During a period of reserve forces service leave you will, if you elect to stay in the LGPS during that leave, continue to build up a pension based on the rate of assumed pensionable pay you would have received had you not been on reserve forces service leave.
Stakeholder pension scheme
These are designed to be low-charge, flexible and easy to use. They are intended for people who cannot pay into an occupational scheme or a suitable personal pension plan. One of the bonuses of such a scheme is that you can choose how much to pay into your pension as-and-when it suits you. When you eventually come to retire, you will use the money saved up to purchase a suitable pension from a personal pension provider.
State Second Pension (S2P) or State Earnings Related Pension Scheme (SERPS)
State Pension Age
If a person in employment does not pay into an occupational or personal pension scheme, they will automatically pay into S2P/SERPS. As soon as an employee’s earnings exceed a lower earnings limit, payments are made to S2P/SERPS in the form of additional national insurance contributions. You cannot 'opt-out' of S2P/SERPS unless you have an alternative pension scheme to pay into.
This is the earliest age you can receive the state basic pension. State Pension Age is currently age 65 for men. State Pension Age for women is currently being increased to be equalised with that for men and will reach 65 by November 2018.
State Pension Age equalisation timetable for women
|Date of Birth||New State Pension Age|
|Before 6 April 1950
|6 April 1950 - 5 April 1951
||In the range 60 - 61
|6 April 1951 - 5 April 1952
||In the range 61 - 62
|6 April 1952 - 5 April 1953
||In the range 62 - 63
|6 April 1953 - 5 August 1953
||In the range 63 - 64
|6 August 1953 - 5 December 1953
||In the range 64 - 65
The State Pension Age will then increase to 66 for both men and women from December 2018 to October 2020.
Increase in State Pension Age from 65 to 66 for men and women
|Date of Birth||New State Pension Age|
|6 December 1953 - 5 October 1954
||In the range 65 - 66
|After 5 October 1954
Under current legislation the State Pension Age is due to rise to 67 between 2026 and 2028 and to 68 between 2044 and 2046. However, the government has announced plans to link rises in the State Pension Age above age 67 to increases in life expectancy. To find out your State Pension Age please visit https://www.gov.uk/calculate-state-pension.
This is the amount of membership that counts for:
Entitlement to a benefit:
- The number of years and days that you have been a LGPS member (at full calendar length for part time employment).
- The number of years and days purchased by a transfer into the LGPS from another pension arrangement.
- Any part time employment prior to joining the LGPS which you have been allowed to count (at full calendar length).
- Any additional years of membership purchased by you or purchased by converting AVCs into a period of membership.
- It does not include any additional years of membership which have been granted to you by your employer.
Calculating a benefit
- The number of years and days that you have been a LGPS member (with part time employment reduced to its whole time equivalent length).
- The number of years and days purchased by a transfer into the LGPS from another pension arrangement.
- Any additional years of membership that you have bought or which have been granted to you by your employer.
- Any additional years of membership purchased by converting AVCs into a period of membership.
- Any membership granted by way of ill health enhancement.
The vesting period in the LGPS is 2 years. You will meet the 2 years vesting period if:
- you have been a member of the LGPS in England and Wales for 2 years, or
- you have brought a transfer of pension rights into the LGPS in England or Wales from a different occupational pension scheme or from a European pensions institution and the length of service you had in that scheme or institution was 2 or more years or, when added to the period of time you have been a member of the LGPS is, in aggregate, 2 or more years, or
- you have brought a transfer of pension rights into the LGPS in England or Wales from a pension scheme or arrangement where you were not allowed to receive a refund of contributions, or
- you have previously transferred pension rights out of the LGPS in England or Wales to a pension scheme abroad (i.e. to a qualifying recognised overseas pension scheme), or
- you already hold a deferred benefit or are receiving a pension from the LGPS in England or Wales (other than a survivor's pension or pension credit member's pension), or
- you have paid National Insurance contributions whilst a member of the LGPS and cease to contribute to the LGPS in the tax year of attaining pension age,
- you cease to contribute to the LGPS at age 75, or
- you die in service.
Widow/er or civil partner's pensions
A pension paid to the surviving spouse/civil partner of a former pension scheme contributor. The spouse/civil partner's pension is a standard part of the benefits package open to LGPS members; no extra cost is required to fund this.