Welcome to the section on membership and contributions. Here you will find information of how much it costs to participate in the scheme, options to improve your benefits, the impact of absences and working part-time, as well as the possibility of transferring pension rights from another scheme.
Please find below, answers to some common questions about membership and contributions.
How much does it cost?
How much it costs you depends on how much you are paid, but it will be between 5.5% and 12.5% of your pensionable pay.
Your rate will depend on which pay band you fall into.
The real cost to you will be less because you do not pay tax on the amount you pay into your pension.
If you work part time or term time you will only pay contributions on your actual pay.
Example
Alex works full time and his pensionable pay is £20,000 a year, this puts him in band 2 so he will pay 5.8% of £20,000.
This works out at £96 a month, but the real cost will be £77 after accounting for tax relief savings.
If he worked part time (half the hours) he would only pay 5.5% of his £10,000 pensionable pay.
What is my contribution rate?
Your contribution rate depends on how much you are paid, but it will be between 5.5% and 12.5% of your pensionable pay. The rate you pay depends on which pay band you fall into.
If you work part-time or term time, your rate is based on the actual rate of pay for your job, so you only pay contributions on the pay you actually earn.
These are the pay bands that apply from 1 April 2024:
|
Pay Band |
Yearly Pay | Main section contribution rate | 50/50 section contribution rate |
|
1 |
Up to £17,600 | 5.50% | 2.75% |
| 2 | £17,601 to £27,600 | 5.80% | 2.90% |
| 3 | £27,601 to £44,900 | 6.50% | 3.25% |
| 4 | £44,901 to £56,800 | 6.80% | 3.40% |
| 5 | £56,801 to £79,700 | 8.50% | 4.25% |
| 6 | £79,701 to £112,900 | 9.90% | 4.95% |
| 7 | £112,901 to £133,100 | 10.50% | 5.25% |
| 8 | £133,101 to £199,700 | 11.40% | 5.70% |
| 9 | £199,701 or more | 12.50% | 6.25% |
Note
The pay band ranges will be increased each April in line with the cost of living.
How can I increase my pension?
Under previous regulations there have been different ways to buy extra membership or pension. You may have one of these arrangements in place and this will be honoured. These previous options have now been closed and we can't accept any new applications. However, from 1st April 2014 there is a new means of buying extra pension and this is detailed below.
Buying extra pension
You can buy more pension, right up to a maximum of £8,344.
The extra pension you buy will be paid the same way as your retirement pension.
How much does it cost?
The cost to you will depend on a number of factors.
Here are some general examples:
Example 1
Kyle is 25 and wants to buy £1,000 additional yearly pension for himself.
He wants to pay the additional contributions he would have to make over 20 years.
The cost of buying £1,000 of additional yearly pension is £51.70 each month for the next 20 years (£12,408 in total).
Example 2
Marion is aged 47 and wants to buy £750 additional yearly pension for herself.
She wants to pay for this over 10 years.
The cost of buying £750 of additional yearly pension would be £103.43 each month for the next 10 years (£12,411 in total).
You can additionally use the online calculator developed by the Local Government Association (LGA) to get an idea of how much the purchase of additional pension might cost you. This can be accessed via the following link:
LGA Additional Pension Calculator
Important
Your pension fund administering authority may require a satisfactory medical report to be submitted, at your cost, before your application is accepted. Where this is the case you will be notified of the process to be followed after submitting your application to pay additional pension contributions.
To find out more, please contact us
Paying Additional Voluntary Contributions (AVCs)
You can pay more contributions to our AVC schemes (sometimes called "in house" AVC schemes).
You choose how much to pay in AVCs and how they are invested. The money will come straight out of your pay and go to the AVC provider who will invest it for you.
What happens when I retire?
You can either use your AVCs to take a lump sum from the fund when you retire or you can buy an annuity.
If you are interested in paying AVCs please contact us for further information about our AVC providers. Alternatively, you can visit the dedicated local government website to view your AVC options.
Note
You get tax relief on extra contributions which lowers their real cost to you.
There are however, limits on the amount of extra contributions you can pay. To find out more please contact us.
What if I take a drop in pay?
If you joined the scheme before 1st April 2014 and your rate of pay reduces this may reduce the value of the final salary part of your pension benefits. However, if your rate of pay is as a result of the regrading of your post as part of a restructure, when you leave the pension scheme you can ask the pension fund to calculate your pension using the best average pay figure from a three-year period within the last 13 years. For more information please contact us.
If your working hours change but your rate of pay remains the same, this will not impact on the pension that you have already built up. For more information please see “What if I work part time or term time?”
Members whose pay reduced before 1 April 2008 may have been given a certificate of protection. This offered similar protection in a similar way. Certificates of protection do not protect members leaving the Scheme now because more than 10 years have passed since the pay reduction.
For more information please contact us.
What if I work part time or term time?
From 1st April 2014 you only pay contributions on the pay you actually earn.
Each April, your employer will decide your appropriate rate of contributions for each employment by matching your actual pensionable pay to the appropriate band in the contribution rates table.
Example
Kate works part time. She works half the hours of a full time colleague.
If she were a full time employee her pay would be £30,000 per year. As she only works half of this time her actual part time pay is £15,000 so she falls into pay band 1. This makes her contribution rate 5.5%.
See "how are my benefits worked out?" for more details about how your benefits are worked out when you retire if you work part time or term time.
What if I am absent from work?
There are many reasons why you might be absent from work. These can include:
- Family leave (maternity leave, paternity leave or adoption leave)
- Sick leave
- Reserve Forces leave
- Authorised leave of absence
- Absences Due to Trade Dispute (strike) - see under 'Related documents' on this page
- Jury service
Find out how different types of absences affect your pension benefits.
Can I transfer my benefits?
If you want to transfer benefits into the Scheme you should complete a transfer request. Please visit the resources page to find the relevant form.
We will investigate and provide you with an estimate of what the transfer payment would buy you in the Scheme. You can then decide if you want to go ahead with the transfer.
You only have 12 months from joining the fund to transfer a previous pension into the Scheme.
Deciding whether to transfer a previous pension is an important decision. You should get independent financial advice before making any decision to transfer pension rights into the Scheme.
Can I combine previous LGPS pension pots?
If you re-join the LGPS, we will normally write to you with any options you may have to combine (or aggregate) your previous pension pots.
Can I reduce my contributions?
As an alternative to opting out, or at times when money is tight, there is an option to stay in the Scheme but pay a reduced contribution.
This is called the "50/50 option" and you can choose to do this at any time.
By selecting the 50/50 option, you only pay half the contributions you normally would pay. However, you only build up half of the pension during the period you pay the reduced 50/50 contribution.