BENEFITS ON RETIREMENT

 

BENEFITS

 

When you retire and have at least three months membership of the Scheme or have transferred in rights from another pension scheme, you will be paid your retirement benefits.

 

Retirement benefits are based on your total membership in the Scheme and your final pensionable pay.

 

The benefits payable are:

 

  1. a retirement pension (which is taxable) at a rate of 1/80th of final pensionable pay for each year of membership

 

  1. a lump sum retirement grant (which is tax free) at a rate of 3/80ths of pensionable pay for each year of membership

 

You may, if you notify us in writing before you retire, choose to take a bigger lump sum by giving up some of your pension. Each £1 of pension surrendered will convert to an additional £12 of lump sum.

 

The maximum lump sum you are allowed to take is 25% of your total fund value.

 

Total fund value = (pension x 20) + normal lump sum + value of AVC fund (if any).

 

However, it should be noted that this calculation is not as simple as it appears as the post-commutation benefits must be taken into account i.e. the calculation must be repeated for the new lump sum and new reduced pension to ensure that the 25% limit is not exceeded.  As the capital value of accrued rights and pension to lump sum conversion are interdependent, a reiterative calculation ensues.

 

If you wish you may request an estimate of your benefits at retirement form the Committee, by contacting us in writing or by phone, or completing the Quote Request Form. In all cases please provide details of your name, address, date of birth, date of retirement and your pension reference number.

 

 

Membership

Your membership in the Scheme is the length of time (in years and days) from joining the Scheme to leaving the Scheme. In addition to part-time service, there are two factors which may effect length of service:-

 

·        Absence from work

If you are off sick and receiving sick pay, your employer will continue to deduct contributions. If you are off sick without pay, your period of absence will still be treated as membership of the Scheme. However if you take unpaid leave for more than one month you will have a break in your membership unless you elect, within 30 days of your return to work, to pay arrears of contributions. Arrears of contributions can only be paid for a period of absence of up to 36 months. Unpaid leave includes career breaks. Contributions must be paid for the first 30 days of any period of unpaid leave.

 

If you previously paid into a pension scheme of either a former employer or to a personal pension scheme before joining the Local Government Scheme, you can ask for the value of the benefits you have built up to be transferred into this Scheme. The transfer value paid will purchase a period of membership in this Scheme.

 

You can apply for a transfer by completing Section B of the Employee’s Membership Option form which will be given to you by your employer when you commence employment. An application to transfer has to be made within 12 months of your date of joining the Scheme.

 

Pensionable Pay

Your final pensionable pay is the pensionable pay in the year to your retirement or either of the two previous years if higher.

 

Any emoluments which are not paid on a fixed basis and are additional to your pay e.g. profit related pay, performance related pay or election fees, are averaged over 3 years or a more favourable period of greater than 3 but not greater than 5 years and are added to your final pensionable pay.

 

If you are a whole-time employee and suffer a material reduction in pay which is not temporary and is beyond your control, you are entitled to request your employer, within 12 months of the date of reduction, to issue a certificate to that effect. The certificate is held for 13 years and if you leave or retire during the 13 year period, the higher pensionable pay is used to calculate your benefits.

 

 

MARRIED MEMBERS WITH PRE-1972 MEMBERSHIP

 

In the case of a married man, membership before 1st April 1972 for married men to count at 89% of its length with a full ‘three-eightieth’ lump sum.  If you are paying, or have paid, extra contributions to uprate to a full three eightieth lump sum for your pre-1972 membership, it will continue to count at its full length.

 

 

PART-TIME EMPLOYEES

 

If you are a part-timer, your membership period and final pensionable pay are calculated differently. Firstly, the total calendar length of your scheme membership is calculated. This is then converted into a whole-time equivalent by comparing the hours you worked to the normal hours of a full-time person in the same job.

 

E.g. if you work 20 hours per week for 20 years and the standard hours are 37 hours per week, your whole-time equivalent membership period would be 20 hours divided by 37 hours multiplied by 20 years which equals 10 years 296 days.

 

Secondly, your final pensionable pay is converted into a whole-time equivalent by comparing the hours you worked to the normal hours of a full-time person in the same job

 

 

E.g. if you work 20 hours per week and earn £5,000 per year, your final pensionable pay would be £5,000 divided by 20 hours multiplied by 37 hours which equals £9,250. Your benefits are now calculated using the whole-time equivalent membership period and whole-time equivalent final pensionable pay.

 

 

DEATH AFTER RETIREMENT

 

Depending on how long the pension has been in payment, a death grant (lump sum) may be payable on death after retirement.

 

If you die, and were married before you retired, your surviving spouse or civil partner will receive a pension payable for three months (six months if there are any dependent children) paid at the same rate as the monthly retirement pension at the date of death. After that a spouse’s pension of half your retirement pension will be paid for life. A civil partner’s pension is half the pension based on your membership from 6th April 1988 and is also payable for life.

 

Children’s pensions in respect of eligible children are also payable.