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Guidance on the definition of pensionable pay.
All pension benefits built up since 1 April 2014 are based on the pensionable pay a member receives in each scheme year. A scheme year is the period from 1 April to 31 March.
Pensionable pay is the amount of pay on which contributions are deducted. From 1 April 2014 this includes all pay received in respect of overtime worked and any additional hours worked in excess of contractual hours. The benefits built up from 1 April 2014 are based on a CARE scheme formula:
A 49th of the member's pensionable pay is put into their pension account every scheme year. Pension accounts are increased in line with an inflationary increase each year.
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.
The official definition of Pensionable Pay under the 2014 LGPS regulations is as follows:
IMPORTANT: Pensionable pay under the CARE Scheme includes both contractual and non-contractual overtime. However under the previous Final Salary pension scheme (pre 1 April 2014) non-contractual overtime is still deemed to be a non-pensionable element of pay. Therefore when calculating a Final Pay figure under these regulations you must only include contractual overtime in this calculation.