Following the introduction of the Career Average Revalued Earnings (CARE) scheme for the LGPS from 1 April 2014 a number of protections are in place for those individuals in the scheme on 31 March 2014. These are summarised below:
The benefit you have built up in the LGPS to 31 March 2014 is safe. So you won't lose out on any of the previous benefits you have earned. Only the benefits you build up in the LGPS from 1 April 2014 onwards are based on the rules of the new scheme.
The benefit you have built up in the LGPS to 31 March 2014 will be calculated using your final pay (as defined in the LGPS as at 31 March 2014) when you eventually leave the scheme or retire. As a result you will receive the benefit of all future pay increases and promotions when assessing the Final Pay to be used in calculating your pre 1 April 2014 LGPS benefits.
If you leave the scheme before your normal retirement age your benefits will be become deferred and will increase each year in line with the cost of living.
If you subsequently re-join the scheme at a later date and aggregate your periods of scheme membership, provided you do not have a break in membership of more than 5 years from any public service pension scheme (e.g. the Teachers, NHS, Civil Service Schemes), any pre 1 April 2014 LGPS benefits will be calculated on your Final Pay when you eventually leave the scheme or retire.
If any break in membership from public service pension schemes is more than 5 years, and you decided to aggregate periods of LGPS membership, any pre 1 April 2014 benefits would not be covered by the Final Pay protection but would instead be converted to a CARE benefit in the new scheme.
Your normal retirement age of 65 is protected for any benefits you have built up in the LGPS to 31 March 2014. The benefits you build up in the scheme from 1 April 2014 will of course have a normal retirement age linked to the State pension age, which over time will be later than age 65.
The rule of 85 protection is changing. As the rules governing this area are complex please contact us for more information.
The Government announced specific protections for any individual who retires from the LGPS at age 65 with immediate entitlement to benefits and was within 10 years of that age on 1 April 2012. This protection is known as the "statutory underpin". The statutory underpin calculation will ensure that you will receive a pension no less than had you continued in the old scheme.
There are also other conditions – you must:
If the statutory underpin applies to you, at the point you retire a comparison will be made between the benefit you could have received had the scheme not changed from 1 April 2014 and the benefits you would be expected to receive as a result of the new scheme (if you are in the 50/50 scheme it's the pension you would have earned in the full scheme used in the calculation). If the benefit you would have expected to get had the old scheme remained is greater the difference will be added to your pension.
If you are purchasing additional membership through added years or ARCs, these contracts will continue under the same terms.
Similarly, if you are paying additional voluntary contributions (AVCs) these will also continue on the same terms as before.