Introduction to Local Government Pension Scheme (LGPS)

Admitted body status

A public service company that has an agreement with the council for some or all of its employees to be in the Local Government Pension Scheme (LGPS).

Contracted out

The LGPS is contracted out of the State Earnings Related Pension Scheme (SERPS). You pay reduced national insurance between the lower and upper earnings limits. This is unless you chose to pay the reduced rate for married women or widows and you do not earn a pension under SERPS.

Instead, the LGPS must pay you a pension. It must be as high as what you would have earned in SERPS. For contracted out membership on and between 6 April 1978 and 5 April 1997 this is covered by a 'Guaranteed Minimum Pension'. For membership after 5 April 1997, the LGPS guarantees that its benefits will be at least as good as those of a scheme under the Pensions Act 1995.

Final pay

This figure is used to calculate most of your pension benefits. It is normally your pay in the last year before you retire, or the higher of your pay in either of the last two years. For a part time employee, the figure used is normally the pay you would have received if you had worked full time. If your pay is cut due to sickness, then your final pay is the pay you would have received if you had not been sick. If your employer has issued a certificate of protection then we may use the sum of your best pay, over the initial period stated.

Guaranteed minimum pension

This is the minimum pension that the LGPS must pay you for your membership in the LGPS from 6 April 1978 to 5 April 1997. It is worked out by using the SERPS entitlement you would have earned if you had not been a member of the LGPS during this period.