Some glossary and pension definition terms we use.
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These are extra payments to increase your future benefits. You can also pay AVCs to provide additional life cover.
All LGPS pension funds have an AVC arrangement in which you can invest money through an AVC provider, often an insurance company or building society. AVCs are deducted directly from your pay and attract tax relief.
An admission body is an employer that chooses to participate in the scheme under an admission agreement. These tend to be employers such as charities and contractors.
Assumed pensionable pay is a notional pay figure that employers must calculate when your pensionable pay is reduced because you are absent from work in certain circumstances, such as sickness or child related leave. This notional pay figure is used to make sure your pension benefits build up as if you were at work receiving normal pay.
Assumed pensionable pay is also used to work out:
This is the earlier of:
Earnings are assessed by converting your pay in a pay period to a yearly figure.
Each employer must automatically enrol their workers who are eligible jobholders into a workplace pension scheme unless the employer decides to postpone for a period up to three months. In certain cases, the employer does not have to an enrol a person. For example, if the person recently opted out.
Where a person is enrolled into a scheme, the person can choose to opt out. If they do, generally, the employer must automatically re-enrol them back into a scheme at regular intervals, about every three years.
A Civil Partnership is a relationship between two people of the same sex (civil partners) which is formed when they register as civil partners of each other.
Club transfer rules allow certain pension schemes to calculate pension transfers on special terms. Public service pension schemes generally operate Club transfers.
The Consumer Price Index (CPI) is the measure used to adjust your pension account in the April following the end of every Scheme year when you are an active member of the Scheme. Each April after you have left the Scheme, it is used to adjust the value of your deferred pension or pension in payment. The adjustment ensures your pension keeps up with the cost of living.
The LGPS was contracted out of the State Earnings Related Pension Scheme, known as SERPS, and the State Second Pension (S2P) from 6 April 1978 to 5 April 2016. This meant that most LGPS members paid reduced National Insurance contributions in this period. If you reached your State Pension age before 6 April 2016, the increases to your pension may be worked out differently.
Designating bodies are employers that can designate employees for access to the LGPS. The main types of designating bodies are listed below, but there are others:
Discretion is the power given by the LGPS to choose how to apply the Scheme rules in certain situations. Your employer and Avon Pension Fund have the power to exercise different discretions.
Throughout this website, we refer to all councillors and mayors as elected members. Only eligible elected members can join the LGPS. To be an eligible elected member, the individual must serve as:
as a mayor:
or as a councillor:
Town and Parish councillors are not eligible for membership.
An Eligible child is:
Eligible children must be:
An eligible cohabiting partner is a partner you are living with who, at the date of your death, has met all the following conditions for a continuous period of at least two years:
Your partner is financially dependent on you if you have the highest income. Financially interdependent means that you rely on your joint finances to support your standard of living. It doesn’t mean that you need to be contributing equally. For example, if your partner’s income is a lot more than yours, he or she may pay the mortgage and most of the bills, and you may pay for the weekly shopping.
A survivor’s pension would be paid to your cohabiting partner if:
On your death, the Fund will require evidence that the conditions for a cohabiting partner's pension are met.
A pension will only be paid to your eligible cohabiting partner if you paid into the LGPS after 31 March 2008.
An eligible jobholder is a worker who is aged at least 22 and is under State Pension Age and who earns more than £10,000 a year.
Final pay is the figure used to work out final salary benefits in the LGPS. Final pay is usually the pay due for your final year of Scheme membership. Pay for one of the previous two years can be used if it is higher. Final pay includes:
Final pay does not include non-contractual overtime.
If you were part time during your final year, your final pay is based on the pay you would have been due if you had worked full time.
If your pay in the final year is reduced because of sickness or child-related leave, final pay is the pay that would have been due if you had not been sick or on leave.
Gainful employment means paid employment for at least 30 hours a week for a period of at least a year.
If you were a member of the LGPS between 6 April 1978 and 5 April 1997, you paid reduced National Insurance contributions. You did not pay into the State Earnings Related Pension Scheme, or SERPS, when you were an LGPS member. The LGPS guarantees to pay you a pension at least as good as you would have received from SERPS. This is called the Guaranteed Minimum Pension or GMP.
The term local government on this website also covers:
Normal Pension Age is the age you can take the pension. It is linked to your State Pension Age for benefits built up from 1 April 2014, with a minimum of age 65. If you choose to take your pension before your Normal Pension Age, it will be reduced, as it's being paid earlier. If you take it later than your Normal Pension Age, it's increased because it's being paid later.
You can use the Government’s State Pension Age tool to check your State Pension Age.
Your State Pension Age may change in the future. If it does, this would also change your Normal Pension Age in the LGPS for benefits built up from 1 April 2014. Once your LGPS pension is being paid to you, any subsequent change in your State Pension Age will not affect your Normal Pension Age in the LGPS.
If you were paying into the LGPS before 1 April 2014, your final salary benefits retain their protected Normal Pension Age which for most is age 65.
All pension benefits paid on normal retirement must generally be taken at the same time. You cannot choose to have your final salary pension (built up before April 2014) paid at age 65 and your pension in your pension account (built up from April 2014) at your State Pension Age. Different rules may apply if you take flexible retirement.
Occupational pension schemes are also called company pension schemes. An occupational pension scheme is a scheme set up by an employer to provide pension or death benefits for its employees.
An occupational pension scheme can provide pension benefits on a money purchase, defined benefits, cash balance or hybrid arrangement basis. Occupational pension schemes are most commonly money purchase or defined benefits schemes. The LGPS is a defined benefits scheme.
When you leave a job you will generally have to stop building up pension savings in that employer’s scheme.
Each Scheme year the amount of pension you have built up during the year is worked out and added into your active pension account. Adjustments may be made to your account during the Scheme year because of:
Your account is revalued in the April following the end of each Scheme year to take account of the cost of living (Consumer Prices Index (CPI)).
You will have a separate pension account for each employment.
A pension credit is a share of an ex-spouse’s or ex-civil partner’s pension benefits. A pension credit is awarded by a Court under a Pension Sharing Order or by a qualifying agreement in Scotland following a divorce or dissolution of a civil partnership.
Pensionable pay is the pay that pension contributions are deducted from. Pensionable pay includes:
You do not pay pension contributions on:
A public service pension scheme is a pension scheme covering:
If your employer allows you to take unpaid leave you can pay extra pension contributions to cover that period for pension purposes.
An arrangement to buy the pension ‘lost’ in an unpaid break will be a Qualifying Additional Pension Arrangement (QAPA) if:
The cost is based on the pension contributions that would have been paid if you had been at work receiving your normal pay. If the unpaid break lasted less than three years, the cost is split between you and your employer. You pay the member contributions at your normal contribution rate and your employer pays the employer contributions.
If the break lasted more than three years, your employer only has to contribute for the first three years of the break. You could still buy the pension you lost in the unpaid period beyond the first three years, but you would have to pay the total cost (member and employer contributions) yourself.
You can pay the extra contributions by lump sum or regular deductions from your pay over a year or a number of years. The contributions must stop before your Normal Pension Age (NPA). If you are over NPA or less than a year below NPA when you return from unpaid leave, you can only pay by lump sum.
The extra pension you buy through a QAPA is known as qualifying additional pension.
The unpaid period covered by a QAPA is the qualifying period of absence.
To qualify for benefits you must be an active member of the LGPS for at least two years. This is called the qualifying period. It is sometimes called the vesting period.
You can meet the qualifying period before two years if you:
Relevant child related leave means periods of:
This occurs when a Reservist is mobilised and called on to take part in military operations. The period of mobilisation can be up to a maximum of 12 months. During a period of reserve forces service leave you will, if you elect to stay in the LGPS during that leave, continue to build up a pension based on your assumed pensionable pay.
The Scheme year runs from 1 April to 31 March.
The State Earnings Related Pension Scheme or SERPS is the earnings-related part of the State Pension that employed people could build up before 6 April 2002. LGPS members were automatically contracted out of SERPS and most paid a lower rate of National Insurance as a result. SERPS was replaced by the State Second Pension (S2P) between 6 April 2002 and 5 April 2016. Contracting out ended on 5 April 2016.
This is the earliest age you can receive the basic state pension. State Pension Age increased to 66 for both men and women between December 2018 and October 2020. It has started increasing again, rising to 67 between April 2026 and March 2028.
Under current legislation, the State Pension Age is due to rise to 68 between 2044 and 2046.
The UK Government is reviewing the State Pension age using the latest life expectancy data and other evidence. This is part of the periodic review process required under legislation.
You can use the Government’s State Pension Age tool to check your State Pension Age.
The State Second Pension or S2P was the additional state pension payable to people who reached State Pension Age before 6 April 2016. LGPS members were contracted out of S2P and paid a lower rate of National Insurance as a result.
Initially S2P was an earnings-related pension but from April 2009 it built up as a flat rate pension. It was replaced with the new single tier State Pension from 6 April 2016. You can find out more about the new State Pension on the Government website.
The vesting period is the length of time that you must be an active member of the LGPS to qualify for benefits in the Scheme. The vesting period in the LGPS is two years. You can meet the vesting period with less than two years’ membership in certain circumstances.
You will meet the two year vesting period if you:
