CARE pay
When doing projections you should ensure the CARE pay reflects your actual annual pay.
CARE pay stored in SPFOnline is usually your actual pay in the last, full LGPS scheme year that your employer has provided us with data for, and you can override it when doing projections.
SPFOnline takes the CARE pay held on our pension administration system for the payroll period(s) reported to date in the current LGPS scheme year and uprates that CARE pay to a full year.
In other words it predicts CARE pay to be received for periods which you have not yet been paid for.
Although each LGPS year starts on 1 April, when actual data is passed to SPFOnline for period one in a year, CARE pay for the whole of these employers' first 28 day pay period is passed over.
This means that 28 days' CARE pay could be passed over for the period 1 April to 16 April if your employer's second pay period starts on 17 April.
SPFOnline then multiplies up the higher (based on 28 days) CARE pay for the remaining period (365 less 16 = 349 days) of a whole scheme year.
This means that SPFOnline will always overstate CARE pay in a year for these employers.
The overstatement will reduce during the year, as actual CARE pay received, not forecast CARE pay for the remainder of the year that has as yet not been paid, will increasingly be a larger part of a total year's CARE pay.
| Accrual rate | The rate at which you build up benefits whilst you are an active member of the LGPS. It is most commonly expressed as a fraction, such as 1/49th, 1/60th, 1/80th etc. The lower the bottom number, the better the pension benefit received for an equivalent amount of pensionable service. |
| Annual allowance (AA) | The annual allowance is the maximum allowable tax-free growth of pension benefits between one year and the next under HMRC rules. An AA factsheet is available on our website |
| Contracted out | The LGPS was contracted out of the State Earnings Related Pension Scheme (SERPS) and State Second Pension (S2P). |
| Deferred benefits | Deferred benefits are benefits that are held after leaving active membership of the LGPS for payment at a future date. |
| Employer discretions | Discretions that Employers have under the LGPS Regulations to make decisions, for example to grant flexible retirement. |
| GMP | The LGPS guarantees to pay a pension that is at least as high as would have been earned had a member not been contracted out of the State Earnings Related Pension Scheme (SERPS) between 6 April 1978 and 5 April 1997. This is called the Guaranteed Minimum Pension (GMP). Being contracted out results in a lower pension from the State in return for having paid lower NI whilst contracted out. |
| Ill health | There are two tiers of ill health: Tier 1 - no reasonable prospect of undertaking gainful employment before state pension age. Tier 2 - reasonable prospect of gainful employment before state pension (25% of prospective service). |
| Membership details | This will show start date, end date and pensionable service for any previous periods of membership which are linked/transferred to a current pension record. |
| Normal Pension Age (NPA) | Your benefits are paid in full if you choose to take them from your Normal Pension Age. For benefits built up from April 2015, your Normal Pension Age is linked to your State Pension age, but is at least age 65. The Normal Pension Age for benefits built up in the LGPS before 1 April 2015 is protected. For most people, the protected Normal Pension Age for these benefits is 65. If you were a member of the LGPS at any time between 1 April 1998 and 30 November 2006, some or all of your benefits could be paid in full before age 65 if you are protected by the 85-year rule. |
| Rule of 85 | The Rule of 85 is satisfied if your age at the date you draw your benefits and your scheme membership add up to 85 or more (part years are ignored). If you are part-time, your membership counts towards the rule of 85 at its full calendar length. The Rule of 85 does not protect benefits from being reduced if they are taken voluntarily by the member before age 60 unless the employer consents to this. |
| State pension age (SPA) | This can be obtained at The normal pension age for benefits earned after 31 March 2015 subject to a min of 65. |
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