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Thinking of Joining

How much does it cost?

Cost to you

There are two sections within the Local Government Pension Scheme (LGPS) - the MAIN section and the 50/50 section.

The MAIN section of the scheme is the section you will be placed in automatically from when you join the LGPS. In that section, you pay normal contributions and get the normal pension build up. The 50/50 section is a new option. You will be able to elect to move to this section if you wish. If you do so, you will then pay half contributions but, whilst you are in the 50/50 section, you will only be building up half the normal pension. If you have more than one employment you can elect for the 50/50 option in one, some or all your employments. Regardless of the section you are in, you get full life assurance cover and you are fully protected under ill-health retirement regulations.

The rate of contribution you pay will be based on your actual pensionable pay.

Contribution rates for MAIN and 50/50 Sections from 1 April 2019 to 31 March 2020:

Band

Salary Range

Contribution Rate

MAIN Section

Contribution Rate

50/50 Section

1

£0 to £14,400

5.5%

2.75%

2

£14,401 to £22,500

5.8%

2.9%

3

£22,501 to £36,500

6.5%

3.25%

4

£36,501 to £46,200

6.8%

3.4%

5

£46,201 to £64,600

8.5%

4.25%

6

£64,601 to £91,500

9.9%

4.95%

7

£91,501 to £107,700

10.5%

5.25%

8

£107,701 to £161,500

11.4%

5.7%

9

£161,501 or more

12.5%

6.25%

If you work part-time your contribution rate will be assessed based on your actual part-time equivalent pensionable pay.

Please Note: The pension you build up within the LGPS is not based on employee or employer contributions. It is based on a specific formula which is applied to the amount of pensionable pay you build up during your membership of the scheme.

To find out more please visit the "How is my pension worked out?" section of the website.

The 50/50 Section

Under the 50/50 section of the LGPS you will pay half your normal contribution rate to build up half your normal pension.

How much will I pay under the 50/50 section?

The monthly contribution rate that you pay is determined by how much you earn as assessed by your employer every April and in accordance with a series of salary bandings. You will pay contributions at the appropriate band rate on all pensionable pay received in respect of your employment rounded down to the nearest whole pound. If you elect to enter the 50/50 section of the LGPS you will pay half of the full contribution.

How will this affect my pension?

Under the 50/50 section you will be paying half of your normal pension contribution and in return you will receive half of the normal pension build up. This is demonstrated in the table below:

Example:

A member works full-time and earns £20,000 per annum. Based on this salary the amount of annual pension that would be added to their pension account at the end of each year would be as follows:

 

  MAIN section Contribution 50/50 Section Contribution
Annual Pensionable Pay £20,000 £20,000
Monthly Pensionable Pay £1666.67 £1666.67
Contribution Rate 5.80% 2.90%
Contribution Amount £96.67 £48.33
Annual Pension Build Up £408.16 £204.08

Therefore based on the above example the member would have £408.16 of annual pension added to their pension account at the end of the Scheme year if they were paying into the MAIN section of the scheme. If the member was paying into the 50/50 section of the LGPS they would have £204.08 of annual pension added to their pension account (£408.16 / 2).

To find out more about the 50/50 section of the LGPS please download our factsheet here. This will also contain the option form to complete if you wish to sign up to the 50/50 section.

How do Contributions affect Income Tax?

As a member of the LGPS, your contributions will attract tax relief at the time they are deducted from your pay. This means that you pay less tax.

What is Pensionable Pay?

The LGPS regulations define pay as being the total of all the salary, wages, fees and other payments paid to the employee for their own use in respect of their employment and any other payment or benefit specified in the contract of employment as being pensionable. This is usually your normal salary or wages plus any bonuses, honoraria, contractual and non-contractual overtime, Statutory Sick Pay, Maternity Pay, Paternity Pay, Adoption Pay.

Pensionable Pay does not include:

  • Travelling or subsistence allowances
  • Pay in lieu of notice
  • Pay in lieu of loss of holidays
  • School achievement awards
  • The monetary value of a car or pay received in lieu of a car

No payment can be pensionable unless it is subject to income tax.

Berkshire Pension Fund

Royal County of Berkshire Pension Fund, Minster Court, 22-30 York Road, Maidenhead, Berkshire SL6 1SF. Tel: 0845 602 7237

Or for further information, please use our online form.