Calculate your deferred benefits

To calculate your deferred benefits:

• Work out what your period of membership was on leaving - how long you were in the scheme, in years and days?
• Divide this figure by 80
• Multiply the answer by your final pay (career average pay for councillors)

Formula for calculating deferred benefits:

Employees in England and Wales who left the LGPS after 31 March 2008: your deferred benefits are calculated differently. 

Employees and Councillors in Scotland who left the LGPS after 31 March 2009:  your deferred benefits are calculated differently.

When you draw your deferred benefits you will be able to take a bigger lump sum by giving up some of your pension. You can take up to 25% of the capital value of your pension benefits as a lump sum - find out about this in adjust the way your benefits are paid out.

There are HM Revenue and Customs controls on the pension savings you can have before you become subject to a tax charge.

All benefits are held in the LGPS where they increase every year, in line with the cost of living, until payment. The pension will further increase with the cost of living, as it is paid out - although special rules apply if your benefits are in payment before age 55.

Examples

Full-time employee: on leaving, a scheme member has a 15 year period of membershipand a final pay of £16,400.

• Yearly pension: 15 years x 1/80 x £16,400 = £3,075
• Tax-free lump sum: 3 x £3,075 = £ 9,225

Part-time employee: on leaving, a scheme member has worked half time for 15 years. They would have a 7 ½ year period of membership and a final pay of £16,400, the whole-time equivalent of £8,200 actual pay.

• Yearly pension: 7.5 years x 1/80 x £16,400 = £1537.50
• Tax-free lump sum: 3 x £1,537.50 = £ 4,612.50

Councillor: on leaving, a scheme member has a 15 year period of membership and a career average pay of £16,400.

• Yearly pension: 15 years x 1/80 x £16,400 = £3,075
• Tax-free lump sum: 3 x £3,075 = £ 9,225