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Regulations for the LGPS (NI) 2015 Scheme

24 July 2014

The regulations for the new LGPS (NI) 2015 scheme have now been made and will come into effect on 1st April 2015.

The key features of the new Scheme are outlined below:

  • The Scheme will change from a final salary to a career average revalued earnings (CARE) model
  • The pension accrual rate increases from 1/60 to 1/49
  • The annual revaluation rate is linked to the Consumer Price Index
  • The normal pension age for the new CARE scheme is now the same as the member’s state pension age (minimum of age 65) meaning that it will be different for everyone
  • The pay bands for member contributions are now based on actual earnings rather than the whole-time equivalent pensionable pay.  Therefore a part-time member who earns £15,000 per year will pay 5.8% whereas in the current Scheme this would be scaled up to what they would earn if they worked full-time - £30,000 and they would pay 6.5%.  The new pay bands for 2015/16 are:
  •  Pensionable Pay

    Contribution Rate

    £0 - £14,000
    £14,001 - £21,300
    £21,301 - £35,600
    £35,601 - £43,000 6.8%
    £43,001 - £85,000 8.5% 
    More than £85,000 10.5%

A person earning less than £43,000 should not pay any increased contributions.

  • Non-contractual overtime and additional hours are now pensionable
  • Members can opt to pay half the contributions and build up half the amount of pension under the new 50/50 option.  The full employer contribution will still be paid so the member will keep the full value of life cover. 
  • Members must now have two years membership to be eligible for a pension rather than three months as at present.  Refunds will be available for those leaving the Scheme with less than two years membership.  There will be transitional provisions to cover the changeover period.
  • The amount of additional pension that a member can buy is increased from £5,000 to £6,500.  This limit will then increase each year in line with pensions increase orders.
  • The amount of additional pension that an employer can award to an active member is increased from £5,000 to £6,500.  This limit will then increase each year in line with pension increase orders.
  • The exchange of annual pension for lump sum rate remains at 12:1 i.e. £12 of lump sum for every £1 of pension given up
  • There are no changes to survivors’ benefits including the requirement to nominate cohabiting partners
  • Ill-health benefits continue to be a two tier system
  • The level of AVC contributions have been changed to allow members to contribute up to 100% of pay.

To view the regulations visit our Document Library