An actuary is a professionally qualified organisation or person, who is able to offer expert advice. The advice can range from a purely data/information provisional role, right through to input and production of pension fund policy and legislation.
This is usually applied to a members pension if you are in the LGPS and retire before they are 65. (Retirement before 60 in the LGPS requires employer’s consent.) .
Additional pensions benefits
This is when you have chosen to pay additional pension benefits to top up your local government pension. There are four options:
- Additional Voluntary Contributions (AVCs) – LGPS ONLY: An in-house option offered through the Prudential.
- Additional Pension Contributions (APCs) – LGPS ONLY: You can pay additional pension contributions to buy up to £6822 per annum of extra pension. You can choose to pay for the extra pension by spreading the payment over a number of complete years or by lump sum. If you wish to spread the payment the contributions would be deducted from your pay, just like your normal contributions. The APC’s are deducted before any tax is taken from your pay. For more information and to apply please visit;- https://www.lgpsmember.org/arm/already-member-extra.php.
- Free-standing additional voluntary contributions (FSAVCs): These are made to a company of your choice
- Stakeholder or personal pension plan: This would be an arrangement outside the scope of the LGPS.
This is an organisation (usually one that provides a public service) that chooses to be admitted to the LGPS so that it can provide the scheme to its employees.
Annual benefits statement
You should receive an annual benefits statement every year which shows the current value of your fund (the amount of money built up by the contributions paid).
Career Average Revalued Earnings (CARE)
In 2014, the Local Government Pension Scheme changed from a Final Salary Scheme to a CARE Scheme. This means that the benefits are based on your salary for each year you are in the scheme, and each year it is revalued in line with Pensions Act increases.
Cash equivalent transfer value (CETV)
This is the actuarial cash value of your pension benefits.
Commutation is an arrangement where part of your pension can be converted into a cash lump sum. This means that your pension will be lower and any pension increases will be applied to this lower amount. The lump sum is tax free, whereas the pension is subject to income tax. Commutation of the state pension is not permitted.
Consumer Price Index (CPI)
Pensions in payment and deferred benefits are increased inline with CPI. CPI is a measure of inflation and is very similar to the Retail Prices Index (RPI) but the major difference is that CPI does not include mortgage interest payments unlike RPI.
In the event of divorce or the dissolution of a civil partnership, the court may decide that your partner should receive a percentage of your pension benefits. This is recorded by Devon Pensions Services, and your ex partner will have a pension record in their own right held with Devon Pension Services and be known as a credited member.
When a member of the scheme dies, a death grant will be payable to whoever the member nominated to be a beneficiary. In the absence of a valid nomination, surviving spouse, registered civil partner or nominated cohabiting partner, or when other persons are claiming all or some of the death grant, the Fund will pay the grant as it sees fit to relatives or dependants at the time of death.
If you were to leave employment, with no entitlement to a refund or to receive payment of your pension benefits on leaving, and you don’t request to transfer your pension to another provider, your pension will be held with us and increase each year in line with CPI. This is called a deferred benefit. It is also known as a preserved benefit. If you do not satisfy the conditions for a deferred benefit your contributions will be frozen and you are entitled to transfer these frozen benefits out, leave them frozen with us, or take a refund of your contributions.
Deferred benefit estimate
This is an estimate of what your deferred pension would be if you choose to leave employment early rather than retire. If you want more information, please contact us.
Eighty-Five Year Rule
This was a method where LGPS members, with a suitable amount of service and age, could elect to receive their benefits early (before age 65) yet avoid the normal early retirement reduction. The calculation to determine eligibility was if the member’s age plus the years of LGPS membership added together equalled at least 85.
Internal Dispute Resolution Procedure (IDRP)
This is the formal complaint procedure.
The Local Government Pension Scheme is available to all local government employees in England and Wales. It is a statutory, funded public service pension scheme whose benefits are defined and set out in law.
This is someone who has joined a pension scheme and paying contributions into the scheme on a regular basis.
Pension Credit is an income-related benefit for pensioners living in Great Britain. More information is available from GOV.UKPensionCredit
Also known as pension attachment. This is when a married couple or a couple in a civil partnership break up and one partner receives an agreed percentage of the other partner’s occupational or personal pension when it is paid out.
Pensions Increase (PI)
Your pension increases each year in line with the Consumer Prices Index (CPI). The annual inflationary increase to pensions payable from 8th April 2019, has been set at 2.4%.
This is when a married couple or a couple in a civil partnership break up and the value of one partner’s pension is compared to the value of the couple’s other assets and the partner with the pension keeps the pension and the other partner receives something of equivalent value.
This is when, at the time of a divorce or dissolution of a civil partnership, the value of one partner’s pension is divided (not necessarily equally) between the two people.
Personal pensions (also known as private pensions) provide you with a regular income in your retirement. You pay regular monthly amounts or a lump sum to the pension provider who will invest it on your behalf. The fund is usually run by financial organisations such as building societies, banks, insurance companies or unit trusts.
This is a period of LGPS membership built up in a previous employment. Although qualifying service relates to service which has not been transferred, it provides scheme members with additional benefits. For example, qualifying service contributes towards the Eighty-Five Year Rule.
Retirement Benefit Estimate
This is an estimate of what your pension should be when you retire. An annual benefit statement is issued every year to all active members of the LGPS, Polce and Fire Scheme providing them with estimated figures on what they are likely to receive. If you want more information, please contact us.
Stakeholder pensions are a type of personal pension. They have to meet certain standards to ensure they’re flexible and have a limit on annual management charges. The minimum payments are also low and you can stop and re-start payments whenever you wish.
State additional pension
The additional State Pension provided by the government can give you extra money on top of your basic State Pension.
You can build up additional State Pension if you are below State Pension age and:
- employed and earning over £5,304 (from any one job)
- looking after children under 12 years old and claiming Child Benefit
- caring for a sick or disabled person for more than 20 hours a week and claiming Carer’s Credit
- a registered foster carer and claiming Carer’s Credit
- receiving certain other benefits due to illness or disability
This is when someone leaves the Local Government Pensions Scheme and elects to transfer out the pension rights they’ve accrued with the scheme into their new employer’s pension scheme or into a personal pension plan of their choice.
This is a cash sum representing the value of your accrued pension rights which can be transferred from one registered scheme into another.