How is my pension calculated?
How is my pension worked out?
You build a individual pension account
From 1 April 2014 your pension is worked out each year. The value is then added to your individual pension account.
All pension built up before April 2014 will be calculated on Final Pay when you leave. For more information on how your pension is calculated before April 2014 see the 'Paying into the LGPS before April 2014' tab.
Every year, you will build up a pension at a rate of 1/49th of the amount of pensionable pay you received in that scheme year (or half this rate for any period you have elected to be in the 50/50 section of the scheme). The amount of pension built up during the scheme year is then added to your pension account and revalued at the end of each scheme year so your pension keeps up with the cost of living. Simply this means that for every £49 that you earn and pay contributions on you’ll get £1 of pension added to your pension account each year.
From 1 April 2014 you will have a pension account for each employment you hold within the scheme. The account is also adjusted for example when you have a transfer in when additional pension is added to the pension account in that year.
And it is revalued each year to keep up with the cost of living
You pension account is revalued each year to keep up with the cost of living. The revaluation rate for the LGPS is the Consumer Price Index (CPI). It is applied in April each year under orders set by HM Treasury.
To help you understand how pension accounts work, there is an interactive Pensions Account Modeller available.
What pensionable pay is used to work out my pension?
Pensionable pay is the amount you earn for hours worked and from 1 April 2014 includes non-contractual overtime and additional hours. This is the amount you pay pension contributions on and the amount your pension benefits are based on.
For more information see the 'LGPS 2014 Leaflets and Guide' tab on the left hand side