Part time working and the effect on pension calculations

As a part-time employee you enjoy the full range of benefits the LGPS provides. There is no minimum hours requirement to join the LGPS.

Watch our new video on why all part time workers should join the LGPS. There is also a factsheet to accompany the video and answers some key questions for part time workers thinking about joining.


 Video Script 


Example: Part-time worker

All pension benefits within the LGPS are calculated using the full time equivalent salary, this avoids a member losing out should they reduce their working hours late in their career. However as a part time worker you only pay contributions on the pay you actually earn.

You should note that if you work term time only your working hours will be reduced to take this into account.

If you are employed on a contract with no fixed hours your pension benefits will be calculated on your proportion of service in a single year against the full time equivalent salary.

The following examples are all based on service in the current scheme (post 2008)

Example: Let’s look at someone retiring at age 65 with 20 years full-time membership in the Scheme and a final year’s pay of £18,000.
Their annual pension is:


20 years x 1/60th x £18,000 = £6,000
Let’s assume that same person had always worked half-time for 20 years i.e. 18½ hours a week in a job where the full-time hours would be 37 per week and with a part-time final pay of £9,000. 
Membership to be used in calculating benefits is reduced like this:
20 years x half-time (18½ ÷ 37) = 10 years
And we would use a full-time equivalent pay figure, so their anual pension is:


10 years x 1/60th x £18,000 = £3,000
They will have paid half the contributions and receive half the benefits of the equivalent full-time person.