1. Deputy Head of Peninsula Pensions
LGPS Pensionable Pay
Shirley Cuthbert
Deputy Head of Peninsula Pensions

2. Agenda What is Pensionable Pay? Basis of Final Pay calculation
Absences
Assumed Pensionable Pay
Help Available

3. What is pensionable pay
LGPS 2013 Regulation 20
All salary, wages, fees and other payments paid to the employee, and any benefit specified in the employees contract of employment as being pensionable. Exclusions shown in Reg 20 (2)
3 Main difference between 2008 and 2014 definitions:
- non-contractual overtime becomes pensionable;
- a payment in consideration of loss of future pensionable payments or benefits is now not pensionable
- any actual pay paid by Scheme employer to a reservist during Reserve Forces Service Leave is not pensionable;

4. Exercise 1 – What is pensionable?
Salary
Fees
Pay in lieu of notice
Weekend/Shift allowance
Lump Sum payment to remove contractual overtime
First Aid Allowance

5. Pensionable Pay Pre & Post 1/4/2014
LGPS 2014
Pensionable Pay Pre & Post 1/4/2014
Leaver with pre & post 1/4/2014 membership:
Employers will need to hold 2 different pensionable pay figures for employees with pre & post 2014 membership:
Actual Pensionable Pay for CARE Pension (April to March/DOL)
(2014 pensionable pay definition)
PLUS
Pensionable Remuneration for full 365 days prior to date of leaving
(2008 pensionable pay definition)
HMRC rules state need to keep records for 6 years plus current but pay details may be needed for 13 years plus current:
Best of last 3 years still required
Reduction in Pay Protections:
pay reduced in previous 10 years (best 3 year average in last 13)
Certificate of Material Change effective (drop 1/4/98 to 31/3/2008)
Still need to confirm any payments after leaving
December 2013

6. Pensionable Pay Pre 1/4/2014
Pensionable Pay for the last 365 days of membership (2008 definition) – not salary point
Uprate the actual pay earned for the period to full-time equivalent (FTE) pensionable pay
based on the hours worked:
Actual pensionable pay x FTE hours / Hours per week (or % of hours) = FTE Pensionable
Pay for that period – not FTE salary
For example: £ x / = £
£ / 50.00% = £
PLEASE NOTE: You will need to split the remuneration figures for any changes in hours or pay so please uprate the part-time pay according to the hours for each period (spreadsheet to help with calculations available on request)

7. Exercise 2 – Calculate Final Pensionable Pay
Harry Potter
Joined LGPS 01/01/2010 Left 12/01/2018
Works 18.5/37hpw
Salary details: £ £
From TO
Actual Pay
Days
Part time hours
FT Equiv Pay
13/01/17
31/03/17 x
78/365
37/18.5
01/04/17
12/01/18
287/365
Total

9. Adjusted pay = £10,000 x 37.00 ÷ 25.00 = £14800 FTE Pensionable Pay
How to calculate full-time equivalent Pensionable Pay (Pre 1/4/2014) for a Term-Time Employee
Devon Fund Employers:
Term-time employees have their hours adjusted to equate to a full year and the full-time equivalent pay is worked out by uprating the actual pay by the adjusted hours
Divide the actual hours by the whole-time equivalent hours for the week then multiply by the week’s factor:
25.00 ÷ x ÷ x 100 = %
(percentage of hours to be stated in the Current Hours section of the Leavers form)
Use the percentage of hours to up-rate part-time pensionable pay to the full-time equivalent pensionable pay:
Somerset Fund Employers
Historically, service for term-time employees within the Somerset Fund has not been adjusted and hours have been recorded as the hours they work. The full-time equivalent pensionable pay is then reduced to take account of the number of weeks worked per year.
Please provide:
The hours they work per week as a percentage
The full-time equivalent pensionable pay reduced to take account of the number of weeks worked per year.
For example: Actual basic annual salary (adjusted to take into account the number of weeks worked each year), plus any additional pensionable recurring pay,) multiplied by the basic hours worked (37), divided by actual hours worked each week.
Adjusted pay = £10,000 x ÷ = £14800 FTE Pensionable Pay

10. Pensionable Pay Post 1/4/2014
LGPS 2014
Pensionable Pay Post 1/4/2014
Cumulative Pensionable Pay (CPP) paid April to March/DOL
No longer required to uprate pensionable pay to full-time equivalent
Include any payment after leaving (confirm additional amount and date of payment)
Include Assumed Pensionable Pay (APP)
Do not include pay which relates to pre April 2014
Split for 50/50 Scheme (CPP1 = main scheme, CPP2 = 50/50 scheme)
Employer required to notify Administering Authority of the amount of pensionable pay paid to a member in Scheme year
For each separate post
Main Section and 50/50 Section must be kept separate
(CCP1 and CCP2)
December 2013

12. Absences
Includes types of absence and who pays contributions

13. Absences Additional Pension Contract (APC) and Shared Cost APC (SCAPC)
When a member has an unpaid break, no pay is received so they have ‘lost’ pension
Member can elect to buy the ‘lost’ pension via paying Additional Pension Contributions (APC).
On-line calculation for members on our website - forms for member to send to employer and Peninsula Pensions.
Shared Cost APC (SCAPC) - If member opts to pay for period of unpaid leave/child related leave within 30 days returning to work (*or longer period as employer allows), then employer must pay 2/3rd of Additional Pension Contribution (APC) costs with employee paying the remaining 1/3rd.
*Employer can extend 30 day period and can choose date member needs to elect by
Employer has to inform member of Shared Cost APC option.
Additional Benefits Team to help and full guidance on our website

14. Pensionable Pay – Salary Sacrifice
HMRC approved salary sacrifice arrangements:
Employee’s contractual pay is reduced by an agreed amount (supported by variation to their contract) in return for a tax assessable benefit in kind from which tax liability is removed
Salary Sacrifice Scheme which fits above remains pensionable under the 2014 scheme.
Sold leave - Holiday entitlement is sold in return for additional pay. Extra pay = payment in consideration of loss of holidays = not pensionable
Bought leave – employee forgoes pay in return for additional days holiday = authorised unpaid leave of absence = APC’s
More info within LGPC Circular 244 – link is on our website

15. Assumed Pensionable Pay (APP)
LGPS 2014
Assumed Pensionable Pay (APP)
Assumed Pensionable Pay is used for reduced or no pay periods (sickness, injury, statutory child related leave (CRL) or reserve forces leave)
Calculated at an annual rate based on the pensionable pay received in the 3 complete months (or 12 weeks if weekly paid) before the start of the applicable period:
For example: Month 1 = £1400
Month 2 = £1500 (inc £100 overtime)
Month 3 = £1400
Annual rate of APP = (£ £ £1400) / 3 x 12) = £17200
Annual figure is then apportioned to the applicable period - replaces any pay received
Ignore any lump sum payments made in the previous 3 months as already included in pensionable pay
Regular lump sum payments can be included at employer’s discretion
APP calculations need to be done each month (for annual pensionable pay)
More guidance within LGA Payroll Guide and on our website
December 2013

16. Exercise 3 – APP Calculation
Date commenced nil sick pay:16th Sept 2017
Returned to work: 1st Nov 2017
Pay information:
June £1,000
July £1,500 - includes £400 bonus and £100 overtime
Aug £1,100
Sept 2017 £500
Answer:
APP for Sept =
APP for Oct =

17. Procedures and Forms One member per email please!
It is advisable that when ing a completed form to that you use a secure ‘gcsx’ address. If a secure address is not available, please print off the completed form, sign it and post it to us

18. Online https://www.peninsulapensions.org.uk/lgps-employer
Phone –

20. Disclaimer
The information contained in these slides are the authors interpretation of the current regulations.
The information is subject to change due to various factors including, but not limited to, changes to rules and regulations introduced by the Government Actuary's Department, HMRC and/or the CLG. Changes can happen at short notice and may be implemented prior to the Council issuing any future revised documentation.
Readers should take their own legal / financial advice on the interpretation of any particular piece of legislation.
No responsibility whatsoever will be assumed by Peninsula Pensions for any direct or consequential loss, financial or otherwise, damage or inconvenience, or any other obligation or liability incurred by readers relying on information contained in these slides.