Warwickshire County Council Pension Fund

AGM 2013

Neil Buxton Pension Services Manager

LGPS 2014

WHAT IS NOT CHANGING

•Statutory•Benefits are defined•Tax – free contributions•Tax free cash option at retirement•Values protected by CPI•Built in life cover / Ill Health Benefits•Employer’s contributions•Great value for money

April 2014 – What’s New?

•Not ‘Final Salary’ but ‘Career Average’•New ‘Accrual’ rate•All pay used to calculate pension•Pension Accounts•Protection against inflation•Flexible membership terms – 50 / 50•New ‘Normal Retirement Age’

How the main scheme will work

• Pension = 1/49th of pay• Earnings = £24,500• £24,500 / 49 = £500

• Which will go into the Pensions Account on 31 March

• CPI = 3%• £15 (3% of £500) will also be added in April

How the 50 / 50 scheme will workPension = half of 1/49th of payEarnings = £24,500£24,500 / 49 = £500£500 / 2 = £250

Which will go into the Pensions Account on 31 March

CPI = 3%£7.50 (3% of £500) will also be added in April

Your pension at retirement

•Your pensions account will contain:•Any pension build up earnt by membership of the LGPS since April 2014•Any CPI rises

•Any previous LGPS service prior to 2014•Details of any tax free lump sum earnt prior to 2008•Any transfers into the LGPS

What pension is now on offer?

• 1/49th is better than 1/60th

• £1 of pension for every £49 of pay

Counting the Cost

• Banded Rates

• Majority of members will pay the same or less

• Average contributions 6.5%

• Contributions now based on all pay (including overtime)

LGPS 2014 – The Cost

Band Actual pensionable pay Contribution rate for that employment

1 Up to £13,500 5.5%

2 £13,501 to £21,000 5.8%

3 £21,001 to £34,000 6.5%

4 £34,001 to £43,000 6.8%

5 £43,001 to £60,000 8.5%

6 £60,001 to £85,000 9.9%

7 £85,001 to £100,000 10.5%

8 £100,001 to £150,000 11.4%

9 £150,001 or more 12.5%

LGPS 2014 – The Basic Benefits

• Pension based on 1/49th of pay• Individual pension account• Price increases applied annually• Family / Dependents benefits• Ill health cover• Death in Service Benefits

LGPS 2014 – Pension Payable When?

• Flexible – between 55 – 75

• Redundancy and efficiency cover provided from 55

• Ill health cover – any age (subject to two years membership)

Indication of Early Retirement Reduction

Pension Lump Sum

Years of leaving to NPA

Male Female Both

1 6% 5% 2%

2 11% 11% 5%

3 16% 15% 7%

4 20% 20% 9%

5 25% 25% 12%

What if I was in the scheme previously?

• Membership up to 31 March 2008• Annual Pension = 1/80 x Final Pensionable Pay x Membership• Tax Free Lump sum = 3 x Pension

• Membership from 1 April 2008• Annual Pension = 1/60x Final Pensionable Pay x Membership• No Automatic Tax Free Lump sum

• Membership from 1 April 2014• Annual Pension = 1/49 x Final Pensionable Pay for each year• No Automatic Tax Free Lump sum

LGPS 2014 – Other Benefits

• 50 / 50 option

pay half – get half!

But get full death in service and Ill health benefits

Increasing my benefits

• Increase benefits – APCs or AVCs

• Two options combination of both or either single option, the choice is yours

More information from:

• Website: www.lgps2014.org

• Includes videos on common topics

• Treasury and Pensions – available for presentations / video presentation for team briefings

Treasury and PensionsPensions@warwickshire.gov.uk

Only 2 Years

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