Pension Remuneration (Final Pay)
As the LPGS is a ‘final salary pension scheme’, correct calculation of the ‘final pay’ is essential in determining that the person receives the right amount of pension.
However, in order to protect the member's salary in the case of pay being decreased, two additional alternatives are allowed under the regulations.
Below are details of the 3 options available:
1). Calculate the pensionable pay for the last year that they worked using the 365 day method
This is called pension remuneration. We recommend using our pension remuneration calculator below to ensure this is done correctly, alternatively you can calculate in manually although we recommend you read the notes and examples below first
2). Use the pension remuneration for either of the previous two years to the one above
The method for doing this is identical as for option 1.
Although the two years covered should be the two exactly preceding the year (as stated in 1) without a gap.
3). Calculate the average of any three consecutive years in the last ten
Note: This option can only be used if the person had a decrease in salary during the last ten years and is only necessary if they request that this calculation to be done and compared to the other options.
You will need to work out pension remuneration for any years you wish to cover (you can use calculator if you wish) to work out the past pension remuneration figures.
As this option involves increases to past yearly figures inline with inflation we have produced a calculator for this which can be found below:
In you have questions about the information above please contact us.
Wiltshire Pension Fund, Wiltshire Council - Bythesea Road,Trowbridge, Wiltshire, BA14 8JJ.
© 2009 Wiltshire Pension Fund.