Glossary

Accrual rate

The formula used to describe the rate at which you build up pension benefits whilst a member of the LGPS (whether under the final salary or CARE elements of the scheme). It is expressed as a fraction (e.g. 1/60th, 1/80th, 1/49th). The lower the bottom number, the better the pension benefit you will receive for an equivalent amount of pensionable service.

Automatic Enrolment

A new type of work-based pension requirement introduced by the Government from October 2012 onwards. It is being introduced over a number of years, with larger employers required to meet the new requirements first and smaller employers phased in over the next few years. Workers can opt out at any time, but may be subject to re-enrolment every three years from the date the employer was first required to comply with the new rules. An employer cannot offer workers inducements (additional pay, holidays etc) or encourage workers not to join or opt out of a workplace pension.

Following the ending of contracting out from 6 April 2016 the LGPS has been certified as satisfying the Alternative Quality Test in relation to the jobholders employed by all participating employers who are relevant members of that scheme, as required by the Occupational and Personal Pension Schemes (Automatic Enrolment) (Miscellaneous Amendments) Regulations 2016.

AVCs

Short for Additional Voluntary Contributions. It is one of the ways you can make extra contributions to increase your future pension benefits. You can do this via our preferred provider, Prudential. See our factsheet on Increasing Your Future Pension Benefits for more information.

Civil Partner

This means a person who you have entered into a civil partnership with, regardless of their gender.

Cohabiting partner

A long term partner you live with who satisfies the necessary criteria.

Deferred benefits

Your benefits are worked out when you leave the Scheme, based on the amount of membership you have built up and your pay when you leave, in the same way as for retirement.

They are then held in the Scheme where they will be revalued every year in line with the cost of living, until they are put into payment.

Eligible dependent children

This includes your own children, adopted children, and certain other children who depend on you financially. They must be under the age of 18 in order for a child's dependent pension to be paid. Or if they continue in full time education, or vocational training, the child's dependent pension can be paid up to the age of 23 (it will cease when they reach age 23). It can even cover some adult children who cannot work because of a disability.

Final pay

Normally this means the pay you received in the last year up to leaving that you pay pension contributions on.

Gainful employment

Gainful employment is defined in the scheme rules as any type of paid work, for at least 30 hours a week over a period of at least 12 months.

Husband or wife

This means your legally married husband or wife. It does not include a 'common law' husband or wife or someone you are living with as husband or wife - but see Nominated cohabiting partner, below.

Membership

Membership is used to work out your benefits and is based on how long you have been a member of the Scheme, plus any extra membership, for example any you transfer in from another pension scheme.

Normal Pension Age

Normal Pension Age is the age from which you can retire and receive your pension in full. Your Normal Pension Age in the LGPS is linked to your State Pension Age (with a minimum of age 65). You can check your Normal Pension age by looking up your current State Pension Age at www.gov.uk/calculate-state-pension.

Part time

You are part time if you work anything less than the number of hours your employer classes as standard full time hours.

Pay

Pensionable pay is the amount of pay on which you pay contributions. From 1 April 2014 it includes non-contractual (as well as contractual) overtime and any additional hours worked in excess of your contractual hours.

Rule of 85

The Rule of 85 was abolished on 1st October 2006, although some scheme members contributing to the LGPS before that date may have some or all of their pension benefits protected under this rule. It is satisfied if your age and scheme membership (in whole years) at the date you draw your benefits add up to 85 or more and is used, to determine the earliest point at which benefits could be taken voluntarily from the LGPS without suffering an early retirement reduction.

State pension age

The age you can draw your State Pension. You can check your state pension age by going to the gov.uk website.