Find brief descriptions of pension related terminology, acronyms & abbreviations
The formula used to describe the rate at which you build up pension benefits whilst a member of the LGPS (whether under the final salary or CARE elements of the scheme). It is expressed as a fraction (e.g. 1/60th, 1/80th, 1/49th). The lower the bottom number, the better the pension benefit you will receive for an equivalent amount of pensionable service.
These are extra payments to increase your future benefits. You can also pay AVCs to provide additional life cover.
All LGPS administering authorities have an AVC arrangement that you can use to invest money with an AVC provider. AVC providers are often insurance companies or building societies. AVCs are deducted directly from your pay and attract tax relief.
An admission body is an employer that chooses to participate in the Scheme under an admission agreement. These tend to be employers such as charities and contractors.
Is a notional pay figure that employers must calculate when your pensionable pay is reduced because you are absent from work in certain circumstances e.g., due to sickness or child related leave. This notional pay figure is used to make sure your pension benefits build up as if you were at work receiving normal pay.
Assumed pensionable pay is also used to work out:
This is the earlier of:
• the day you reach age 22, provided you are earning more than £10,000 a year in your job, or
• the beginning of the pay period in which you first earn more than £10,000 in your job, provided you are aged 22 or more and under State Pension Age at that time.
Earnings are assessed by converting the pay in the pay period to a yearly figure.
Each employer must automatically enrol their workers who are eligible jobholders into a workplace pension scheme unless the employer decides to postpone for a period up to three months. In certain cases, the employer does not have to enrol a person. For example, if the person recently opted out.
Where a person is enrolled into a scheme, the person can choose to opt out. If they do, generally, the employer must automatically re-enrol them back into a scheme at regular intervals, about every three years.
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A Civil Partnership is a relationship between two people of the same sex which is formed when they register as civil partners of each other.
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Eligible children are your children. They must, at the date of your death:
• be your natural child (who must be born before, or within 12 months of, your death)
• be your adopted child, or
• be your stepchild or a child accepted by you as being a member of your family and be dependent on you. This doesn’t include a child you sponsor for charity.
Eligible children must:
• be under age 18, or
• be aged between 18 and 23 and in full-time education or vocational training.
Your administering authority can continue to treat the child as an eligible child notwithstanding a break in full-time education or vocational training, or LGPS member guide
• be unable to engage in gainful employment because of physical or mental impairment and either:
has not reached the age of 23, or the impairment is, in the opinion of an independent registered medical practitioner, likely to be permanent and the child was dependent on you at the date of your death because of that mental or physical impairment.
An eligible cohabiting partner is a partner you are living with who, at the date of your
death, was free to marry or enter a civil partnership with you and the relationship
has met all the following conditions for a continuous period of at least two years:
• you and your cohabiting partner have been living together as if you were a married couple, or civil partners, and
• neither you nor your cohabiting partner have been living with someone else as if you/they were a married couple or civil partners, and
• either your cohabiting partner is, and has been, financially dependent on you or you are, and have been, financially interdependent on each other.
Your partner is financially dependent on you if you have the highest income.
Financially interdependent means that you rely on your joint finances to support your standard of living. It doesn’t mean that you need to be contributing equally. For example, if your partner’s income is a lot more than yours, he or she may pay the mortgage and most of the bills, and you may pay for the weekly shopping.
On your death, a pension would be paid to your cohabiting partner if your partner satisfies your LGPS administering authority that:
For this purpose, your administering authority will require evidence.
You are not required to complete a form to nominate your partner. However, you can provide your LGPS administering authority with your partner’s details.
An eligible jobholder is a worker who is aged at least 22 and is under State Pension Age and who earns more than £10,000 a year. Earnings are assessed by converting the pay in the relevant pay period to a yearly figure.
This is usually the pay in respect of (i.e., due for) your final year of Scheme membership on which you paid contributions, or one of the previous two years if this is higher. It includes your normal pay, contractual shift allowance, bonus, contractual overtime (but not non-contractual overtime), Maternity Pay, Paternity Pay, Adoption Pay, Shared Parental Pay and any other taxable benefit specified in your contract as being pensionable.
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Normal Pension Age for those paying into the Scheme or who deferred after the 1 April 2025 is linked to your State Pension Age for benefits built up from 1 April 2015 (but with a minimum of age 65) and is the age at which you can take the pension in full. If you choose to take your pension before your Normal Pension Age it will normally be reduced, as it's being paid earlier. If you take it later than your Normal Pension Age, it's increased because it's being paid later.
You can use the Government’s State Pension Age calculator to find out your State Pension Age.
Your State Pension Age may change in the future. If it does, this will also change your Normal Pension Age in the LGPS for benefits built up from 1 April 2015. Once your LGPS pension is being paid, any later change in your State Pension Age will not affect your Normal Pension Age.
If you were paying into the LGPS before 1 April 2015, your final salary benefits retain their protected Normal Pension Age, which for most is age 65.
All pension benefits paid on retirement (except flexible retirement) must be taken at the same date. You can’t choose to have your final salary pension (built up before
April 2015) paid at age 65 and your pension in your pension account (built up from April 2015) at your State Pension Age (or age 65 if later).
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Each Scheme year the pension you have built up during the year is worked out and added into your active pension account.
Your account may be adjusted during the Scheme year due to:
Scotland (following a divorce or dissolution of a civil partnership) and
Your account is revalued at the end of each Scheme year to take account of the cost of living. This is currently based on the Treasury Revaluation Order index. While these orders tend to be the same as Consumer Prices Index (CPI) in September of the previous year, it is not guaranteed. We receive confirmation of the increase around 2 months before it is due to be applied.
You will have a separate pension account for each employment.
In addition to an active member’s pension account there are also:
These accounts will be adjusted due to any Pension Sharing Order or qualifying agreement in Scotland (following a divorce or dissolution of a civil partnership) and due to any Annual Allowance tax charge that you have asked the Scheme to pay on your behalf. These accounts are increased each April based on Pensions Increase (Review) Orders and Guaranteed Minimum Pensions Increase Orders which are set out by HM Treasury.
A deferred refund account will not be adjusted in these ways
The pay on which you normally pay contributions is your normal salary or wages plus any shift allowance, bonuses, contractual overtime, Maternity Pay, Paternity Pay,
Adoption Pay, Shared Parental Pay, Parental Bereavement Pay, and any other taxable benefit specified in your contract as being pensionable.
You do not pay contributions on:
made for the purpose of achieving equal pay
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Relevant child related leave includes periods of:
This occurs when a Reservist is mobilised and called on to take part in military operations. The period of mobilisation can be up to a maximum of 12 months. During a period of reserve forces service leave you will, if you elect to stay in the LGPS during that leave, continue to build up a pension based on the rate of assumed pensionable pay you would have received had you not been on reserve forces service leave.
Scheme year
The Scheme year runs from 1 April to 31 March.
This is the earliest age you can receive the basic state pension. State Pension Age for women was increased between 2010 and December 2018 to be equalised with the State Pension Age of 65 that applied to men up to December 2018.
Date of birth New State Pension Age
Before 6 April 1950 = 60
6 April 1950 - 5 April 1951 in the range 60 - 61
6 April 1951 - 5 April 1952 in the range 61 - 62
6 April 1952 - 5 April 1953 in the range 62 - 63
6 April 1953 - 5 August 1953 in the range 63 - 64
6 August 1953 - 5 December 1953 in the range 64 - 65
The State Pension Age increased to 66 for both men and women between December 2018 and October 2020.
Date of birth New State Pension Age
6 December 1953 - 5 October 1954 in the range 65 - 66
After 5 October 1954 = 66
Under current legislation, the State Pension Age is due to rise to 67 between 2026 and 2028 and to 68 between 2044 and 2046. However, the UK Government has announced plans to bring forward the rise to 68 to between 2037 and 2039.
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To qualify for benefits you must be an active member of the LGPS for at least two years. This is called the qualifying period. You can meet the qualifying period before two years if:
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