Your Deferred Illustration Calculation of your benefits The Local Government Pension Scheme is a final salary scheme so your benefits are based on how much membership you built up with us, and your final whole-time pay (even if you ever worked part-time). The benefits you have built up and the calculation we use to work out their value can differ depending on whether you were a member when the new-look scheme came into force on 01/04/08.

Did you leave the scheme before 01/04/2008?

You have built up an entitlement to a pension and an automatic lump sum.  We have used the following formula to work out the value of those benefits:

Pension = Membership x pay on leaving / 80
Lump sum = Membership x pay on leaving / 80 x 3   (ie 3 x pension)

When your benefits are due to come into payment, you may also have the option to take a bigger lump sum by taking a reduced pension.  If you told us you wanted to *opt out of the A-day tax changes, you may be able to increase your pension by taking a smaller lump sum.  More details about the exchange options available to you will be provided when we offer you payment of your benefits.

*(see ‘Opted out of A Day tax changes’ section)

Did you join and leave the scheme on or after 01/04/2008?

You have built up an entitlement to a higher rate of pension (compared to how we used to work out pension before the rules changed in April 2008) but you do not have an automatic entitlement to a lump sum – that is why there is no amount shown in that section of your statement. You may, however, be able to create a lump sum by taking a reduced pension but more details about this exchange option will be provided when we offer you payment of your benefits.

We have used the following formula to work out your pension:

Membership x pay on leaving / 60

Did you join the scheme before 01/04/08 but leave on or after that date?

You have built up an entitlement to a pension and an automatic lump sum (but only based on the membership you built up to 31/03/2008).  The calculation of your benefits uses two formulae because we have to work out the benefits you have built up to 31/03/2008 under the ‘old’ rules, whilst the benefits you have built up from 01/04/08 are calculated as per the ‘new’ April 2008 rules, as follows:

Pension = Membership to 31/03/2008 x pay on leaving / 80
PLUS       Membership from 01/04/08 x pay on leaving / 60

Lump Sum = Membership to 31/03/2008 x pay on leaving / 80 x 3

When your benefits are due to come into payment, you may also have the option to take a bigger lump sum by taking a reduced pension.  More details about the exchange options available to you will be provided when we offer you payment of your benefits.

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