The calculation of your benefits can be different depending on when you built up the benefits, so your pension could be calculated using up to three different calculations and if you had membership before 1 April 2008, you will also get an automatic lump sum.
When you retire, you can elect to give up some of your pension to provide a lump sum or increase your automatic lump sum.
2 Pension and lump sum calculations
Your pension is calculated as follows:
- 1/60 49* x your pensionable pay paid in each year from 1 April 2014 (with relevant increases)
*or 1/98 if you elected to join 50/50 Section
- 1/60 x your membership between 1 April 2008 and 31 March 2014 x your final pay
- 1/80 x your membership before 1 April 2008 x final pay
Your lump sum is calculated as:
- 3/80 x your membership before 1 April 2008 x final pay
Your final pay is usually the pensionable pay you earn in your final year or either of the previous two years if they are higher.
You may also be able to elect for a higher final pay if you have had a reduction or restriction in your pay in the last 10 years up to your date of leaving.
Where applicable, the Pensions Team will provide you with more details when you leave.
3 Early retirement reductions
Your benefits are calculated on the basis that they are first paid on your normal pension age (NPA). However, you can draw them from age 55 onwards providing you have left the Local Government Pension Scheme (LGPS) employment in which the benefits were built up.
If you have left your employment and decide to draw your pension early, the benefits are reduced to take account that they will be in payment longer.
Generally, your benefits up to 31 March 2014 will have a NPA of age 65, and benefits built up after that date will have a NPA in line with your State Pension Age at the date your benefits are drawn.
If you were a member of the scheme before 1 October 2006, you may also have protections under the 85 year rule. The 85 year rule may protect some or all of your benefits against some or all of the reductions to your benefits despite them being drawn before your NPA.
Reductions are applied separately to each part of your benefits as different reductions may apply to different periods.
4 Normal pension age (NPA)
Your Normal Pension Age (NPA) is the later of your State Pension age or age 65. However, any benefits you have accrued before 1 April 2014 will continue to retain the NPA applicable under the 2008 Scheme (age 65).
This means that, if your NPA is later than age 65 and you take payment of your benefits after age 65 (but before your NPA), any pre-1 April 2014 benefits you have accrued will receive a late retirement enhancement, though any benefits accrued since 1 April 2014 would be reduced for early payment.
Retiring after your NPA
If you retire after your NPA, your benefits will receive a late retirement enhancement. This is an increase that is applied to your benefits to reflect that they are being paid for a shorter period - the gap between your retirement date and your eventual date of death has now shortened.