What if I reduce my hours?

You will build up pensionable service more slowly from the date you reduce your hours. There will be no impact on pension benefits you have already built up, as we use a whole time equivalent pensionable pay figure to make calculations

Working part time

If you work part time, we calculate your benefits in the same way as for full time workers, but:

• The total membership is scaled down to the percentage of whole time you work
• The final pay is scaled up to the whole time equivalent rate.

You can use the calculator below to give you an idea of the pensionable service you will accrue for each year of employment:

Will my pension contributions be reduced?

If you simply reduce your hours, but remain on the same whole time equivalent pay the actual amount you pay will also be reduced, however the percentage contribution rate you pay will remain the same.

Reduced or frozen pay

This information is for members of the Local Government Pension Scheme whose rate of pay drops or is frozen.

It does not apply to you if your pay drops or freezes because of

• Reduced hours
• Reaching top of pay scale
• A temporary pay increase that ends
• Flexible retirement

 

Your Local Government Pension Scheme (LGPS) benefits are based on final pay, or it’s whole-time equivalent if you work part-time. Final pay is usually what you earn in your last 12 months of membership.

This means a drop in your rate of pay can reduce the amount of your pension. However LGPS rules give you some protection:

  

Best of the last 3 years

The highest pay from any of the three years before you leave the LGPS can be used. This will protect your pension if you leave less than 3 years after a drop in pay. Your employer should automatically assess the best of the last 3 years when you leave the scheme.

Best 3 year average in the last 10 years

Your average pay from any three years, ending 31 March, in your last 10 years of membership can be used. This will help if you leave the LGPS less than 10 years after a drop in pay. The pay must have dropped after 31 March 2008 and during continuous employment.

You can ask for this if, for example

• You moved to a lower paid role because your employer asked or you chose to
• Pay for your role was reduced or frozen

You cannot ask for this if

• Your pay has stayed the same because you have reached the top of your pay scale
• Employees did not receive a pay rise that year – they are not contractual

If the pay used is from a year earlier than your final year, your pension will increase with the cost of living since that earlier year.

 

Separate retirement benefits

Your employer can allow you to ‘freeze’ your pension as at the day before your drop in pay. You would then receive two separate pensions at retirement,

• One based on your pay and membership before your drop in pay and
• One based on your pay and membership after the drop in pay.  

The frozen pension would increase with the cost of living from the date of the pay drop.  

If you are allowed to ‘freeze’ your pension  

• You can only change your mind if you do so within 12 months of the pay drop, unless your employer has a policy that allows longer.
• Your ‘frozen’ pension will be based on what you were earning before the drop in pay, no matter what your final pay is when you leave.
• A deferred (‘frozen’) pension will usually be paid at your normal retirement date. If you retire early (for example, due to redundancy or ill health ) only pension earned after the drop in pay can be paid early.
• If you satisfy the ‘85-year rule’, only your frozen pension will be protected.
• If you pay Additional Regular Contributions or Additional Voluntary Contributions, they will need to be reviewed. Please contact Pension Services.

If you leave the LGPS the day before a drop in pay, and rejoin while still working for the same employer, you cannot choose to have separate pensions. Pension for both periods will be based on your pay when you leave the LGPS.

Leaving or changing jobs

Been a member for less than 3 months?

If you have been a member for less than three months and have not transferred in other pension benefits, then you may be entitled to a refund of contributions.

Refunds will be paid less 20% tax and the cost of buying you back into the State Second Pension (S2P).

 

Been a member for more than 3 months?

If you have been a member for more than three months when you leave, your payroll team will provide us with all the information we need to work out your final pension.  We will then write to you to confirm what benefits you have accrued in this period of membership.

You will then have two possible options:

• Transfer the value of your benefits to another scheme or arrangement (up to one year before your normal retirement date). You would need to contact your new pension provider to find out how to do this and whether they would accept the transfer.
• Leave your pension in the Scheme (known as 'deferred benefits').

If you re-join the LGPS, you will be able to join the benefits you have accrued in any previous job with those you build up in your new job. This does not happen automatically, you will need to complete a Starter Information and Membership Option form to elect to do this.

   

In terms of your Local Government pension we treat both voluntary and compulsory redundancies in the same way.

Do you have less than three months membership in the scheme?

You will be given the option to have a refund of your pension contributions, adjusted for tax and national insurance or transfer your rights to another pension scheme (you will need to authorise your new pension provider to contact the Pension Fund on your behalf).

 

Do you have more than three months membership in the scheme?

When you leave on the grounds of redundancy what happens to your pension will depend on your age on your last day of service:

 

For members under age 55

Your benefits remain in the scheme - these are called 'Deferred Benefits'. Deferred Benefits are calculated using your total membership in the Scheme and usually your final year’s pensionable pay The Fund will send you full details of your Deferred Benefits shortly after your last day of membership Every year, Deferred Benefits increase in line with the rise in prices; each year the Hampshire Pension Fund will send you an Annual Statement showing you the current value of your benefits For more information on Deferred Benefits, please see our 'Past Member' section on the website.

 

For members aged 55 and over
You will receive immediate, unreduced payment of your Scheme benefits Your retirement benefits are payable from the day after your official last day of membership and can not be deferred (frozen) to a later date. Your retirement benefits are calculated based on your total membership in the Scheme and usually your final year’s pensionable pay. For an approximate idea of the amounts payable, see the “Current Value of Benefits” section of your latest Annual Benefit Statement or ask your employer for an estimate You have the option of taking a tax-free lump sum by giving up some of your annual pension
What information do you need from me for my pension to be paid? Your employer will provide you with a 'Retirement Declaration Option Form' to complete and return to pension services.  We will also require your employer to provide us with the relevant authorisation form and all the information we need to work out your final pension. You will receive the first payment of your pension, plus your tax-free lump sum, within 25 working days of the Hampshire Pension Fund receiving all your completed retirement forms and final information Pay from your Employer. Pensions are paid monthly in arrears on the last working day of the month.
What happens to any additional contributions I am paying? If you are currently paying additional contributions in the form of Additional Voluntary Contributions (AVCs), Added Years or Additional Regular Contributions (ARCs) the additional benefits are also payable  - these maybe subject to reductions ARC - benefits will be payable immediately, however the pension will be prorated to the end of the contract and will be subject to early payment reductions AVC - benefits will be payable immediately Added Years - you will have the option to purchase the remainder of the Added Years contract before you retire. If you choose not to complete the contract you will receive prorated service. The pension payable will be subject to early payment reductions.
What additional benefits will I receive on my pension? Pensions in payment are increased in line with the rise in prices each year If you die within 10 years of retirement, there would be a lump sum payable to your nominee(s) plus pensions payable if, when you died, you left a widow/er, registered civil partner or nominated cohabiting partner or any children under age 18, under 23 and in full-time education or with a disability defined under the Disability Discrimination Act 1995.