Your pension benefits

How can I find out my Normal Pension Age and my State Pension Age?
Can I receive my pension if I am being made redundant or leaving on the grounds of efficiency of the business?
Can I receive my pension, if I am too ill to work?
What is flexible retirement and does this apply to me?
Can I retire after my Normal Pension Age?
Can I take Voluntary retirement without the content of my Employer?
Will my benefits be reduced?
What is Pensionable pay and how does it affect my pension?
How are my benefits calculated?
How do I request an estimate of my benefits?
What is the Annual Allowance and Lifetime Allowance limit and how will I know if I have exceeded them?
Will I get an Annual update on my pension benefits?
How do I let the ERPF know that I want to retire?
What is the vesting period?

How can I find out my Normal Pension Age and my State Pension Age?

Your Normal Pension Age in the LGPS is age 65 or your new State Pension Age if this is higher. You can find you current State Pension Age below:

GOV.uk - State pension age (external website)

Please be aware that this may change in the future.

As your Normal Pension Age is linked to State Pension Age any changes to State Pension Age in the future will apply to the entire pension you build up in the scheme after 31 March 2014. That means that the age when you can take your pension without suffering any actuarial reduction or actuarial increase to your pension will change.

If you built up membership in the LGPS before April 2014 then you will have membership in the final salary scheme. These benefits have a different Normal Pension Age, which for most is age 65.

Can I receive my pension if I am being made redundant or leaving on the grounds of efficiency of the business?

If you are aged 55 or over and you are leaving on the grounds of redundancy or business efficiency, your main benefits are payable immediately without any early retirement reductions as long as you have met the 2 years vesting period in the scheme.

However, any additional pension paid for by an additional contribution contract like Additional Pension Contributions (APC’s) or Additional Regular Contributions (ARC’s), may be paid at a reduced rate. You should receive an estimate of the pension you can expect to receive before your retirement, if you do not receive an estimate please ask your employer to request one for you.

Can I receive my pension, if I am too ill to work?

If you have to leave work due to illness you may be able to receive immediate payment of your benefits as long as you have met the conditions of the 2 year vesting period. Ill health benefits can be paid at any age and are not reduced on account of early payment.

Your employer must be satisfied that you are permanently unable to do your own job until your Normal Pension Age. They will refer you to an independent occupational health physician, appointed by them, for an independent opinion on whether or not you meet these criteria.

The independent occupational health physician will also inform your employer of the likelihood of you being able to undertake other paid employment of at least 30 hours a week for aperiod of 12months or more as this will affect the level of ill health pension that you will receive.

Tier 1: If you are unlikely to be capable of paid employment for not less than 30 hours in each week for a period of not less than 12 months before your Normal Pension Age, ill health benefitsarebased on:

The pension you have already built up in the scheme at your date of leaving

plus

The pension you would have built up, calculated on assumed pensionable pay, had you been in the main section of the scheme until you reached your Normal Pension Age.

Tier 2: If you are unlikely to be capable of paid employment for not less than 30 hours in each week for a period of not less than 12 months within 3 yearsof leaving, but are likely to be capable of undertaking such employment before your Normal Pension Age, ill health benefits arebased on:

The pension you have already built up in the scheme at your date of leaving

plus

25% of the benefits you would have built up, calculated on assumed pensionable pay, had you been in the main section of the scheme until you reached your Normal Pension Age.

Tier 3: If you are likely to be capable of paid employment for not less than 30 hours in each week for a period of not less than 12 months within 3 yearsof leaving, or before your Normal Pension Age if earlier, ill health benefits are based on:

The pension you have already built up in the scheme at your date of leaving but payment of these benefits will be stopped after 3 years, or earlier if you are ingainful employment or become capable of such employment, provided you have not reached your Normal Pension Age by then. Details would be provided at the time of your retirement.

The assumed pensionable pay for these purposes is calculated as the average of the pensionable pay you received for the 12 weeks (or 3 months if monthly paid) before you left employment due to ill health retirement. In calculating the average, any reduction due to authorised leave of absence or due to a trade dispute is ignored. Also, where an independent registered medical practitioner certifies that, during the period used to determine assumed pensionable pay, you were working reduced contractual hours because of the ill health which led to your retirement or death in service, the assumed pensionable pay is to be calculated on the pay you would have received during that period had you not been working reduced contractual hours. The resulting figure is then grossed up to an annual figure.

Please note, if you have previously received an ill health pension from the LGPS, the pension you are awarded may be affected. Details of the pension payable to you in the event of your retirement on the grounds of ill health will be sent to you at the time.

What is flexible retirement and does this apply to me?

Flexible Retirement gives you the ability draw some or all of the pension benefits that you have built up from age 55, if you reduce your hours or move to a less senior position, helping you ease into retirement, as long as you have met the 2 years vesting period.

This option is only available if your employer has a policy that allows this and they agree to your retirement. You can ask your employer for further details of their policy.

If your employer agrees to flexible retirement you can still draw your wages / salary from your job on the reduced hours or grade and continue paying into the LGPS, building up further benefits in the scheme.

If your employer has a policy that allows and agrees your flexible retirement then you would have to draw:

all of the benefits that relate to any pre 1 April 2008 membership, plus
all, none or some of the benefits that relate to your membership from 1 April 2008 to 31 March 2014, plus
all, none or some of the benefits that relate to your pension built up from 1 April 2014, plus
any additional benefits bought under an added years contract which commenced before 1 October 2006 or derived from an Additional Voluntary Contributions (AVC) contract that commenced before 13 November 2001, plus
any additional pension being purchased either through Additional Pension Contributions (APCs), Shared Cost APCs or Additional Regular Contributions (ARCs), any additional pension awarded by your employer and any benefits derived from an AVC contract that commenced on or after 13 November 2001 (should you choose to draw these).

If you take flexible retirement before your Normal Pension Age your benefits will normally be reduced for early payment.

If you receive payment of your benefits on flexible retirement, then your benefits will not be subject to reduction or suspension for re-employment whilst you are in a job with the employer that allowed you to take flexible retirement. However, if you leave and are re-employed in local government or by an employer who offers membership of the LGPS then you need to let us know about your new job so that can check whether your pension in payment is affected in any way.

Can I retire after my Normal Pension Age?

If you choose to carry on working after Normal Pension Age you will continue to pay into the LGPS, building up further benefits. When you eventually retire you will receive your pension unless you choose to delay drawing it. You must draw your pension by no later than age 75.

To take account of the fact that you will be drawing your pension after your Normal Pension Age your benefits will be paid at an increased rate.

Can I take Voluntary retirement without the consent of my Employer?

You can choose to retire at any time between the ages of 55 and 75, provided you have met the 2 year vesting period. You do not need your Employer’s permission to draw your benefits before your Normal Pension Age but reductions may apply to your benefits more details are provided below.

Will my benefits be reduced?

If you voluntarily retire before your Normal Pension Age then your benefits will normally be reduced to take account of the fact that they are being paid early and therefore your pension will be in payment for longer. The amount of the reduction will depend upon how early you draw your benefits.

The reduction is calculated in accordance with guidance issued by the Secretary of State from time to time. The reduction is based on the length of time (in years and days) that you retire early – i.e. the period between the date your benefits are paid and your Normal Pension Age. The earlier you retire, the greater the reduction.

As a guide, the percentage reductions (as at April 2014) for retirements up to 13 years early are shown in the table below. Where the number of years is not exact, the reduction percentages are adjusted accordingly.

Band	Pension reduction	Lump sum reduction
0	0%	0%
1	5.1%	2.3%
2	9.9%	4.6%
3	14.3%	6.9%
4	18.4%	9.1%
5	22.2%	11.2%
6	25.7%	13.3%
7	29%	15.3%
8	32.1%	17.3%
9	35%	19.2%
10	37.3%	21.1%
11	41.6%	N/A
12	44%	N/A
13	46.3%	N/A

No reduction is applied to benefits paid for retirement on the grounds of ill health or redundancy.

What is Pensionable pay and how does it affect my pension?

Pensionable Pay

This figure is used to calculate career average pension from 1 April 2014. It is the pay on which you normally pay contributions on your normal salary or wages plus any shift allowance, bonuses, overtime (both contractual and non-contractual), maternity pay, paternity pay, adoption pay, shared parental pay and any other taxable benefit specified in your contract as being pensionable.

You do not pay contributions on any travelling or subsistence allowances, pay in lieu of notice, pay in lieu of loss of holidays, any payment as an inducement not to leave before the payment is made, any award of compensation (other than payment representing arrears of pay) made for the purpose of achieving equal pay, pay relating to loss of future pensionable payments or benefits, any pay paid by your employer if you go on reserve forces service leave nor (apart from some historical cases) the monetary value of a car or pay received in lieu of a car.

More information on how your pension is calculated is detailed in the How are my benefits calculated question below.

Final pay

This figure is used to calculate the final salary benefits accrued to 31 March 2014 (if you have any). It is usually the full time equivalent pay in respect of (i.e. due for) your final year of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher, and 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.

If you were part-time for all or part of the final year the whole-time pay that you would have received if you had worked whole-time is used and if your pay in your final year was reduced because of sickness or relevant child related leave, final pay is the pay you would have received had you not been on sick leave or relevant child related leave.

More information on how your pension is calculated is detailed in the How are my benefits calculated question below.

How are my benefits calculated?

Post 1 April 2014 benefits are calculated as follows:

main section membership: CARE Pensionable Pay x 1/49
50/50 section membership: CARE Pensionable Pay x 1/98
Any pension you buy in each scheme year through an APC (Additional Pension Contribution) contract
The amount of pension that any transfer into the scheme purchases is added to your pension account in the scheme year in which the transfer takes place.

Some examples of how CARE is built up in your pension account are available here Calc examples

If you have membership in the scheme before 1 April 2014, your benefits before this date are calculated using your service and final pay before 1 April 2014.

Pre 1 April 2014 benefits are calculated as follows:

service up to and including 31 March 2008: Final Pay x Service (in years and days) x 1/80
service from 1 April 2008 to 31 March 2014: Final Pay x Service (in years and days) x 1/60
the pre 1 April 2008 automatic lump sum: Final Pay x Service (in years and days) x 3/80

If you worked part time your service would have been reduced by the proportion of the full time equivalent hours you worked but your final pay would be calculated on the full time equivalent and would ignore times when you may have been on reduced contractual pay or no pay due to sickness or injury, on ordinary or paid additional maternity/ paternity/ adoption leave, paid shared parental leave, or on reserve forces service leave.

After 1 April 2014, any Assumed Pensionable Pay for these periods of leave will be included within the CARE figure.

Details of how any contracts you have for buying additional pension benefits will be treated are available to view below;

Extra contributions and retirement table (pdf 299kb opens in new window)

How do I request an estimate of my benefits?

Before making a decision on whether or not to retire you need to make sure that you know the benefits you will receive.

All estimates can be requested through your employer but estimates for the following types of retirement:

Ill-Health
Redundancy
Flexible Retirement
Interests of business efficiency

These MUST be requested through your Employer as they require your Employer’s consent.

You can request an estimate directly from our Retirement team for voluntary retirements between the ages of 55 and 75 by completing an estimate request form and sending it to us. The form can be downloaded below:

Member estimate form (pdf 363kb opens in new window)

You can also request this type of estimate through your Employer.

What is the Annual Allowance and Lifetime Allowance limit and how will I know if I have exceeded them?

Her Majesty’s Revenue and Customs (HMRC) places restrictions on:

the total amount of contributions you can make into all pension arrangements and receive tax relief
the increase in your pension savings each year before you become subject to a tax charge, this is called the Annual Allowance
the amount of benefits you can receive at retirement before you become subject to a tax charge, this is called the Lifetime Allowance.

This is in addition to any tax due under the PAYE system on your pension once it is in payment.

Although there is no limit on the amount of contributions you can pay into your pension arrangements, tax relief will only be given on contributions up to a total of 100% of your taxable earnings in each tax year. There are, however, some restrictions on the amounts you can buy or pay into some contracts where you make extra contributions in the LGPS.

Most people will be able to save as much as they wish as their pension savings will be less than the allowances.

Will I get an Annual update on my pension benefits?

The ERPF sends out an Annual Benefit Statement (ABS) each year to members who are active members of the scheme around 31^st August each year. The statement shows you the benefits you have accrued to date and gives you an idea of the benefits you could receive at your Normal Pension Age or in the event of your death.

Unfortunately sometimes not everyone receives an ABS, usually because we are making important changes to your record that means any statement we sent would be incorrect. If you have not received your ABS this year we will be trying to correct your record before the next ABS statement is due to make sure you receive a statement next year but if you require a statement this year please email ABS@eastriding.gov.uk

How do I let the ERPF know that I want to retire?