Reporting Pensions newsletter

Back to basics - how does my pension build up?

The LGPS has been a Career Average scheme since 1 April 2014. This means that the pension you build up is based on your pay. 

1/49th of your pensionable pay is put into your pension account every year. The balance in your pension account at the end of each year is adjusted in line with the cost of living. 

Your pension account will continue to build up in the same way every year. 

Example

Let’s say you earn £24,500 per year. Each year you add 1/49th of your salary to your pension.

1/49th of £24,500 = £500

So, every year you build up £500 towards your pension. 

If you worked for 10 years (earning £24,500) you would have earned a pension of 

10 x £500 = £5,000 per year

which will be waiting for you when you retire. If your salary increases, you build up more pension.

• If you have more than one job, you will have a separate pension account for each employment. 
• If you are buying extra pension by paying Additional Pension Contributions or Shared Cost Additional Pension Contributions, the amount you buy in each year is added to your pension account.
•  If you join the 50/50 section of the LGPS, you pay half your normal contributions for half the normal pension build-up. Each year you are in the 50/50 section 1/98th of your pay is put into your pension account instead of 1/49th. 

How benefits built up before April 2014 are worked out

The LGPS changed from a final salary scheme to a career average scheme on 1 April 2014. If you joined the Scheme before 1 April 2014, you have built up benefits in the final salary scheme.

• For membership built up between 1 April 2008 and 31 March 2014 you receive a pension of 1/60th of your final pay as a pension.
• For membership before 1 April 2008, you receive a pension of 1/80th of your final pay plus an automatic lump sum of three times your pension.

Your final pay is usually the full-time equivalent of your pensionable pay in the year you leave the Scheme. Pay from one of the previous two years can be used if it is higher.

Learn more about the LGPS and watch our Pensions Made Simple videos.

Thinking of retiring? 

You must give Pensions Services 3 months’ notice if you plan to take you pension earlier than your Normal Pension Age. Your Normal Pension Age can be found on your Annual Benefit Statement, on your member self-service, or you can contact the team to confirm if you are unsure. We need 3 months’ notice even if your contractual notice period for your job is shorter than that. If you don’t give us enough notice, we will move your retirement date to three months away. 

We know this is annoying when it happens – but this is not our rule; it is part of the regulations of the LGPS. The best way to avoid being caught out is to plan ahead!

You can either write us a letter, or complete a Retirement Declaration form which you will find on our web pages:

https://www.oxfordshire.gov.uk/business/oxfordshire-pension-fund/pension-scheme-members/active-members/i-am-thinking-retiring/planning-retire

If you have more than one job, please make sure you tell us which job your Retirement Declaration relates to.

Contacting the team

We are always happy to receive your emails, phone calls and letters asking us questions about your pension benefits. In fact, answering your ad-hoc correspondence is a considerable part of our day-to-day work. 

Please help us to be more efficient, by not contacting us multiple times for the same query. We use a complex work management system. Sending us a letter and then following it up shortly after with an email and/or a phone call or emailing multiple addresses only slows down the service for you, the team and everyone else. 

Most day-to-day queries are scheduled to be answered within 10 working days of receipt - please wait at least 10 working days before following up your initial query by any mode of communication.

Midlife money MOT

Are you between 45 and 65? Are you dreaming of a comfy retirement, or worrying about tackling your debts? You can now give your money situation a little health check using the free Money Midlife MOT tool. It will help you to assess your current financial situation and plan for the future. 

You can use this free tool to:

• identify actions to improve your finances, according to your priorities
• help you plan for the future and make sure you stay on track to achieve your goals

You will answer a series of questions about your finances. Your personalised report will then tell you what to prioritise and give you links to guidance, articles, tools and resources to help you improve your financial wellbeing in areas such as:

• retirement planning
• estate planning
• budgeting
• managing unexpected costs
• preventing and managing debt
• paying for your home

You won’t need any documents or extra information to use the tool; it only takes about 5 minutes to complete. Your information will remain anonymous, but you can download your results.

You can also run a midlife MOT of your health and your work.

Money helper is an arms-length body sponsored by the Department of Work and Pensions.

Pension investment review

In November 2024, Chancellor Rachel Reeves announced a pension investment review into the LGPS. The review would consider merging the investments of the 86 LGPS pension schemes into a few much bigger 'mega-funds' to boost growth and enable massive investment into large-scale projects. 

Investment pools were originally set up in 2016 to reduce investment-related costs. Oxfordshire Pension Fund is part of one of these investment pools, the Brunel Partnership. 

LGPS members will not see any change to their pension due to this review as the review focuses on investment and not scheme design or administration. The LGPS remains a defined benefit scheme, and your pension benefits remain guaranteed and secure.

Contact us 

Pension Services 
4640 Kingsgate 
Cascade Way 
Oxford Business Park South 
Oxford 
OX4 2SU 

Phone: 03300 241 359 
pension.services@oxfordshire.gov.uk 
www.oxfordshire.gov.uk/pensions 
My Oxfordshire Pension: https://oxfordshire.pensiondetails.co.uk/ 

Please note that the information here cannot override the regulations. In the event of a dispute, we will use the appropriate regulations. 

This newsletter contains statutory information.