One of the few good things about getting older is that your pension pot gets bigger every year. So, if you’re ever feeling depressed about having the odd grey hair, take a quick look at your annual benefits statement and you might find it puts a smile on your face.
What is your annual benefit statement?
It’s a summary of all your pension benefits for the year. As well as showing you the benefits accrued over the course of your membership, it provides an estimated forecast of the benefits you can expect when you retire.
Where can I view my latest statement?
Your benefit statement is updated every year and is available to view in your online account. If you haven’t set up an account yet, just follow the on-screen instructions to register.
Remember, most of the figures on your statement are estimates. So, before you make any rash decisions about retirement, be sure to call the LPPA helpdesk on 0300 323 0260.
How can I update my pension details?
You can update your personal details on the self-service section of your online account. It only takes a few minutes and you can alter everything from your name, address and contact details to your marital status and beneficiaries.
Important update, following the McCloud judgement
on the 20 December 2018, the Court of Appeal ruled that the 2015 reforms to the Firefighters’ and Judges’ pension scheme were discriminatory. The Government accepted that this ruling applied to all public service pension schemes. As such, it is working on removing this discrimination to all affected scheme members. Realistically, this will only impact your pension in a positive way and any changes will be handled automatically. Latest information here.
Making sense of the details
Your questions answered.
Although we try to make your benefit statement simple, straightforward and easy to understand, it’s only natural that you will have one or two questions. If you’re looking for answers, you’re in the right place.
When do I qualify for scheme benefits?
Usually you need to have been a member of your pension scheme for at least 2 years (or a minimum of three months for Fire Service pension schemes), before you qualify for benefits (unless you have transferred from another scheme, or hold deferred pension benefits with another Local Authority Fund).
When can I retire?
All the projections on your benefits statement are based on you making contributions up until your Normal Pension Age (NPA).
For members of an LGPS scheme (only), this is linked to State Pension Age (SPA), which for most people is at least 65 (but the good news is you don’t have to wait that long. If you want to retire early, you can start taking your pension from the age of 55, providing you have left the employment that relates to the benefits you are taking. Just be aware that your benefits (including any lump sum) will be reduced based on your age at the time.)
For more information visit your online account. And remember, the figures on your benefit statement do not take into account any changes around State Pension Age, which are subject to change (see Gov.uk.)
What is a CARE pension?
CARE pension (Career Average Revalued Earnings pension) is the calculation method used to calculate pension benefits in the LGPS 2014, Fire Pension Scheme 2015 and Police Pension Scheme 2015. Essentially, the value of the pension payable at retirement is based on an average of the earnings you have received throughout your career. The scheme allocates a percentage of your annual salary to your pension account, each year the income you have built up is revalued in line with inflation. The income payable to you at retirement is based on the amount of pension income you have built up throughout your career. The value of the pension that is payable to you is based on when and under what circumstances you access your pension. To consider the value of your own CARE pension please register or login into your online account.
For a more detailed breakdown, visit your online account.
What happens if I have multiple jobs?
If you have more than one job within your organisation, you will receive a separate benefit statement for each of your roles. Likewise, if you have a second pension with a different employer, you should receive a separate benefits statement.
What is a deferred pension?
If you have stopped paying into the pension scheme, but not yet taken your pension, you will have what is known as a deferred pension. This means that your pension benefits are held until you are ready to claim them and will increase in line with inflation (CPI).
With a deferred pension, you will continue to receive an annual benefit statement and a forecast of your benefits (each employment would be treated as a separate pension entitlement unless a decision to link them is made).
Can I pay more to increase my benefits?
The simple answer is yes. But if you want to top up your pension fund there are different ways of doing it, which will depend on the scheme of which you are a member.
The best solution will depend on your personal priorities. So, before making any decisions, it’s always worth speaking to an independent financial adviser or pensions adviser.
Are my additional contributions included in my annual benefit statement?
If you are paying additional contributions into your pension, these are automatically included in your annual benefit statement. Unfortunately, the values aren’t listed separately, so you won’t be able to see the difference they are making to your projected benefits.
What happens to my pension benefits if I stop being a member?
Don’t worry, if you leave your employment or opt out of the scheme there may be two different options available to you; you may be entitled to a refund of your pension contributions (depending on how long you have been contributing to the scheme as well as other factors); or your pension will become ‘frozen’ and you will become a deferred member of the fund. As a deferred member you still retain many of the similar benefits as an active member including life cover albeit at a lower level. You can access your pension when you become eligible. If you cease to become a member of these scheme your employer will notify us of this, and we will write to you outlining your individual options.
Does it affect my pension if I take unpaid leave?
Ultimately, this depends on why you are absent. If the reason for your unpaid absence was as a result of sickness, injury or standard maternity leave, then your pension will not be affected by your period of unpaid absence. Your pension will build up as normal based on your Assumed Pensionable Pay (APP). APP is based on the average of your pay in the three month prior to your absence. If you take authorised unpaid leave for any other reason (e.g. additional maternity leave, career break) you will not automatically accrue pension during the period of leave. When you return to work your employer will contact you to notify you of your lost pay as well as to provide details of how you can buy back the lost pension. To buy back lost pension you should set up an Additional Pension Contributions contract (APC). For any periods of authorised unpaid leave that is not protected by APP, your employer should contribute to the cost of buying back the lost pension. For more information on this please contact your employer.
If you take unpaid leave for any other reasons (for example, additional unpaid maternity), you may not be able to accrue any pension during your time off. In this case, it’s always worth speaking with your employer, who will be able to confirm how much you would lose and whether there’s an option to buy your lost pension back.
What happens to my pension if I die?
If you die as an active member of the scheme, a ‘survivor pension’ is payable to any eligible family members, such as a husband, wife or partner or child. We also pay a ‘death grant’, which is a tax-free lump sum that is worked out as a multiple of your salary.
What if I have been furloughed from my job?
The CARE benefits you have accrued for the year are based upon the amount of pay you received. If you have been affected by the Government’s Furlough Scheme and your pay was less than your normal pay, the CARE benefits will be less than you would had otherwise accrued on normal pay or possibly estimated on previous benefit statements.
Final salary benefits are usually calculated using the pensionable pay earned in the year before leaving the scheme; however, one of the two previous years’ pay is used, if higher. This should prevent the final salary benefits from being detrimentally affected if your pay is reduced due to being on furlough.
Your statement estimates the benefits at your normal retirement age based on the pay you received over the last year and if this has been reduced, this may reduce the estimated benefits going forward compared with the estimated benefits quoted on last year’s statement.
Please note that we are unable to provide your benefit statement based on projected earnings if you are no longer affected by the Furlough Scheme.
If I marry after retirement, will my partner be entitled to the same benefits?
If a marriage or civil partnership occurs after retirement, the ‘survivor benefits’ are sometimes restricted by the period of membership:
Will my annual benefit statement include details of my annual allowance?
No. If you have exceeded your annual allowance for pension tax-relief, you will receive a separate letter from us explaining what to do next.
You can find more details about your annual allowance on your online account