Examples of costs for employer discretions
Examples of costs attributed to Employer Discretions
Below we have calculated several estimates of employer costs as a result of an employer exercising their discretions. It is important to note that these figures are just a guide and can vary largely based upon the key details of age, final pay, number of years service and the amount of added benefits given.
Due to the high number of permutations possible in exercising discretion, we can not easily cover all cases here. However, if in formulating or amending your discretions you allow yourselves to consider each case based on its merits, you can ask for an estimate from us for a specific employee before making a final decision. Please note the cost of giving additional years of service is high because these years are neither funded by the employee nor the employer through contributions yet the member receives benefits as if this had been the case.
Example 1
- 57 year old Male
- Final year salary of £32,000
- 15 years of LGPS service
- Augmentation of 1 year as a result of Employer Discretion
Estimate of costs to employer:
£35,851 - cost for allowing Early Retirement or making them redundant
£10,290 - cost of giving 1 additional year of service
Example 2
- 63 year old Male
- Final year salary of £30,000
- 10 years of LGPS service
- Augmentation of 1 year as a result of Employer Discretion
Estimate of costs to employer:
£5528 - cost for allowing Early Retirement or making them redundant
£8409 - cost of giving 1 additional year of service
Example 3
- 62 year old Female
- Final year salary of £17,000
- 20 years of LGPS service
- Augmentation of 2 years as a result of Employer Discretion
Estimate of costs to employer:
£12,572 - cost for allowing Early Retirement or making them redundant
£ 9,775 - cost of giving 2 additional years of service
Example 4
- 59 year old Female
- Final year salary of £40,000
- 20 years of LGPS service
- Augmentation of 3 years as a result of Employers Discretion
Estimate of costs to employer:
£48,682 - cost for allowing Early Retirement or making them redundant
£37,800 - cost of giving 3 additional years of service
Wiltshire Pension Fund, Wiltshire Council - Bythesea Road,Trowbridge, Wiltshire, BA14 8JN.
© 2009 Wiltshire Pension Fund.