Planning Your Retirement - THE LOCAL GOVERNMENT PENSION ...

Final payThis is the figure used to calculatemost of your pension benefits andis normally your pay in the lastyear before you retire, or one ofthe previous two years’ pay if thatamount is higher, or, if you havesuffered a reduction or restrictionin your pay (occurring after31 March 2008) in the last 10years before retirement, the averageof the best three consecutiveyears pay, ending on a 31 March,in the ten years before retirement.For a part-time employee, thefigure used is normally the payyou would have received if youhad worked whole-time.If your pay is reduced becauseof sickness, the final pay is takento be the pay you would havereceived if you had not been sick.During any period of maternity,paternity or adoption leave inrespect of which you pay (or aredeemed to have paid) pensioncontributions, final pay includesthe pay you would have receivedhad you not been on maternity,paternity or adoption leave.If a Certificate of Protection hasbeen issued please refer to page9. Should you reach age 65and continue in employmentplease refer to page 31.Guaranteed MinimumPension (GMP)This is the minimum pension thatthe LGPS must pay you in relation tothe period that you were a memberof the LGPS on and between6 April 1978 and 5 April 1997. It iscalculated by reference to the StateEarnings Related Pension Schemeentitlement that you would haveearned if you not been a memberof the LGPS during this period.Lifetime AllowanceThis is the total capital value ofall pension benefits you canhave without triggering an excessbenefits tax charge. If the valueof your pension benefits whenyou draw them (not includingany State Retirement Pension,State Pension Credit or anyspouse’s, civil partner’s, cohabitingpartner’s or dependant’s pensionyou may be entitled to) is morethan the lifetime allowance, or morethan any primary lifetime allowanceprotection or enhanced protectionyou may have, you will have topay tax on the excess benefits.The lifetime allowance is set by theTreasury. The lifetime allowancecovers any pension benefits youmay have in all tax-registeredpension arrangements - not justthe LGPS. Most Scheme members’pension savings will be significantlyless than the lifetime allowance.45