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Active/Current Member
An active member of a pension scheme who is accruing pensionable service via contributions paid to the pension scheme on a regular basis.
Actuarial Reduction
An actuarial reduction is applied to a member's accrued pension benefits in order to offset any additional cost arising from their payment in advance of their normal retirement date.
Actuary
An actuary is a professionally qualified body or person, who is able to offer expert advice to those organisations who employ their services. The advice can range from a purely data/information provisional role, right through to input and production of pension fund policy and legislation. The actuary for the LGPS is the Government Actuaries Department (GAD); a non-profit organisation, specialising in offering actuarial services to the public sector.
Added Years
Added Years were an option by which scheme members purchased additional LGPS service in order to augment their own accrued service (and thus increase the value of their pension entitlement). Members would pay an increased rate of contribution in order to purchase this additional service. Added Years were removed from the LGPS with the introduction of the April 2008 'New Scheme' (although any Added Years contracts entered into before this day will continue to be honoured).
Administering Authority
Devon County Council is the administering authority' for LGPS contributors employed by local authorities (and admitted bodies; see below) in Devon. An administering authority is responsible, amongst other things, for maintaining member records, dealing with member queries/requests, investment of the fund and paying your pension.
Admitted Body
An 'Admitted Body' is a term given to an employer who is carrying out work that is very similar in nature to a public service (i.e. similar to the services a local authority provides; housing associations, specialist schools, care in the community etc). An employer must apply to become an Admitted Body, the success of which results in a contractual arrangement between the employer and the administering authority that its employees may join the LGPS.
Annual Benefit Statement
An annual process which results in the production of a benefit calculation for every member (and every employment that member may have) held on our pensions database (excluding existing pensioners, employees who have left the scheme with no benefit entitlements and/or deceased members). The estimate is accurate as of the last complete financial year or, in the case of deferred statements, the members date of leaving the authority. WIth circa thirty-six thousand current contributors, and twenty thousand more deferred members, you should be advised that we cannot guarantee every statement to be 100% accurate at the time of printing.
AVC's
Additional Voluntary Contributions are paid by a scheme member in order to provide for a complementary retirement benefit. The contributions are paid into a 'pot' held by an external AVC provider, from which retirement benefits shall eventually be paid. As of April 2006, the previous 15% maximum contribution rate has been replaced with a new personal annual allowance limit of up to 100% of your pensionable earnings (although this does have a limit of sorts; £215, 000 per annum). Devon County Council currently has arrangements with two AVC providers; Equitable Life and Prudential.
Beneficiary
A person who will receive some form of benefit payment from the scheme once certain events come to pass (e.g. a spouses pension payable on the death of an existing scheme member).
Benefits Agency
An independent body which administers the State Pension Scheme (or 'old age pension' as it is often called). Any worker in the UK can become entitled to a State Pension, whereas only people who have worked in Local Government (and paid into the LGPS) are entitled to an LGPS pension. The Benefits Agency administers the State Pension Scheme; pension departments of the various local authorities (Devon County Council, Cornwall County Council etc) are only responsible for the LGPS.
Benefits Forecast/Estimate
Whilst it is not possible for us to make a guaranteed prediction of your benefits at retirement age, we can produce estimates which will give you a rough idea of what your pension is likely to be (the nearer you are to retirement age, the more accurate your estimate will be). Generally speaking, we provide estimates (on written request) showing benefits at the age of 60 and 65, although you can stipulate an alternative date if you so wish.
Best Value
Legislation bought in by the Government in an attempt to make local authorities more accountable for their actions and expenditure. By conducting reviews of their individual departments, local authorities are expected to stream-line services and ensure that the public they serve are receiving good 'value for money'.
CEP (Contributions Equivalent Premium)
When a scheme member leaves the LGPS and opts for a refund of their contributions, a sum of money (the CEP) is payable to the DSS to cover the cost of reinstating the member into SERPS (State Earnings Related Pension Scheme).
Certificate of Protection
A Certificate of Protection of Pension Benefits is intended to protect, for a period of up to 10 years, pension rights accrued by a scheme member who has been forced to accept a lower rate of pay or whose pay has been restricted in some unforeseen fashion.
With the introducton of the new look LGPS in April 2008, the certificates have now been withdrawn from service. We have kept access to our Certificate of Protection page available for now, though purely for historical reference.
Contracted-In/Contracted-Out
As well as providing a flat-rate pension, the DSS is also responsible for working out and paying pensions under SERPS (State Earnings Related Pension Scheme). Funds/administrators (the LGPS being one) can choose to contract-out of SERPS by guaranteeing to pay a second pension at least as good as SERPS - a 'Guaranteed Minimum Pension' (see below).
Contributions
A regular amount of money paid into a pension scheme in order to guarantee you a pension at the end of your working career. Contributions into the LGPS will be between 5.5%-7.5% of your gross pay (see table below) and will be shown on your monthly/weekly pay advice. It is possible to pay even higher contribution rates, by paying into an AVC or FSAVC plan.
Full time Equivalent Salary |
Contribution Rate |
£0 - £12,000 |
5.5% |
£12,000+ |
5.8% |
£14,000+ |
5.9% |
£18,000+ |
6.5% |
£30,000+ |
6.8% |
£40,000+ |
7.2% |
£75,000+ |
7.5% |
Deferred Member
A member who leaves the scheme with more than 3 months service (and hence becomes entitled to Deferred Benefits) is known as a Deferred Member. The member is not allowed to continue paying into the LGPS after leaving local government employment (unless they commence work with another authority at a later date).
Department for Communities and Local Government
The DCLG's primary interest is in working towards improving delivery and value for money from services offered by local authorities. It takes an active role in planning and implementing various programmes, with the cooperation of local authorities, in order to ensure local government works as efficiently as possible. For more information, please visit their website.
Early Leaver
A member of the scheme who leaves before pension benefits are brought into payment (normally becoming entitled to preserved benefits).
Early Retirement
A member who leaves the scheme, with immediate entitlement to benefits, before the recognised normal age of retirement (age 65 for men and women).
Earnings Cap
If you joined the scheme on or after 1st June 1989, the earnings cap is the maximum pay you can pay contributions on and upon which your benefits can be calculated. The figure is reviewed annually by the Government and should increase in line with the Retail Prices Index. The Earnings Cap for 2005/6 is £105,600. Please note; the Earnings Cap has now been made redundant due to new lifetime allowance limits introduced in the April 2006 regulations.
Eighty Five Year Rule
The Eighty-Five Year Rule was a method by which scheme members were allowed to retire early (rarely earlier than 60 however), and without a percentage reduction, if their age and total membership in the scheme totalled 85 years or more. It was withdrawn from the LGPS as of the 1st October 2006. Please see our notes on the '85 Year rule' for further explanation on how the removal of the rule could effect you.
Enhancement
Enhancement is an additional amount of pension paid by your employer on top of your own accrued benefits. This is usually provided as some kind of compensation gesture, most commonly associated with retiring on redundancy and interest of efficiency retirements. The enhancement is an additional amount of monthly pension, paid for the duration of the pensions existence (unlike a gratuity, which is a one off payment).
Final Pay
This is normally the pensionable pay you earn in the 365 days immediately preceding your retirement date, or one of the previous two years pensionable pay (if one happens to be a higher figure). If you work part-time (less than 37 hours a week and/or term-time only), the figures used in your pension calculations are uprated to that of full-time equivalent pensionable pay (i.e. the annual pensionable pay you would have received had you worked 37 hours a week).
Flexible Retirement
The "Flexible Retirement" option allows scheme members to start receiving their benefits from an earlier age (currently 50 years and over), yet continue working for their employer for several more years in exchange for reducing their hours and/or scale point. Scheme members MUST have their employers consent in order to retire in this manner.
For reference, we have made the policy for Devon County Council 
(141KB - pdf help) available (this is also available on the internal "HR Guidance & Policy" pages). If you do not work for DCC, you should contact your employers Human Resources department and ask them for the relevant policy document.
Frozen Contributions
A member who leaves the scheme with under 3 months pensionable service becomes entitled to a refund of contributions or a transfer-out. Until one of these choices is made, the contributions are 'frozen' - retained by the council until a choice is made. It should be noted that members shall never become entitled to benefits from these frozen contributions, even if they leave at retirement age or keep the contributions with the council until the normal retirement date (65).
Note: Members should be advised that, as of 6th April 2006, electing to take a refund of contributions will result in ALL rights to ANY other LGPS benefits you may have accrued (within England and Wales) being waived. This includes (but is not restricted to); frozen contributions, concurrent employments, deferred benefits, pension credits and/or pensions in payment. As soon as your election for a refund is received, all of these benefits shall become null and void, with immediate effect. This covers benefits held by any administering authority of the LGPS (England and Wales); not just the authority that administers your current fund.
FSAVC (Free Standing Additional Voluntary Contributions)
As opposed to an in-house AVC scheme (organised through our in-house providers; Equitable Life and Prudential), a FSAVC is an arrangement you make independently of us with a pension provider of your choosing. Once you retire, you can use the contributions paid into your FSAVC to purchase the extra pension from a provider of your choice (note: you will only be able to buy this pension from us if you are paying into the in-house scheme).
Guaranteed Minimum Pension (GMP)
In agreeing to contract-out of SERPS, an employer must agree to guarantee a second pension of at least equivalent value had the member stayed paying into SERPS. This is the minimum pension that the LGPS must pay you, had you been a member of the LGPS on and between 6th April 1978 and 5th April 1997.
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Ill Health Early Retirement
If you have at least two years membership and are certified as being permanently incapable to perform your duties, you will be entitled to an ill health pension. Your benefits will be calculated using service accrued up to your ill health retirement date, plus an enhancement depending on the severity of your illness -
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Late Retirement
Late retirement refers to a scheme member who works up to, and beyond, their normal retirement age (65 for both men and women) without receiving any payments in respect of their pension entitlement. They will be eligible for immediate payment of benefits as soon as they leave their current employment (an action which must be made before their 75th birthday).
Local Government Employers (LGE)
The LGE's (formerly known as the LGPC) primary function is to act as the representative for all of the local authority pension funds within the United Kingdom, particularly in their dealings with the DCLG. For further information, please visit their website.
Local Government Pension Scheme (LGPS)
The occupational pension scheme available to all local government employees in England and Wales, including those employees who are entitled to join the pension fund under an admission agreement agreed with the local administering authority (which includes civilian members of Police and Fire Authorities and support staff at further education establishments, but NOT uniformed officers or teachers).
Member
An employee of the County Council, Unitary Authorities and/or Admitted Bodies who, at some stage in their working career, has been a member of the Local Government Pension Scheme. The term is generally used when referring to an active member of the pension scheme (an employee who is still in local government employment and is paying contributions to the scheme every month).
Normal Retirement Date
The date to which the majority of scheme members are expected to work before they retire. In the case of the LGPS, the normal retirement date for both men and women is the day before their 65th birthday.
Occupational Pension Scheme
A pension scheme to which only employees of a particular company or related group of employers is eligible to contribute. As soon as the employee leaves the employer, they will no longer be eligible to pay into the pension scheme.
Pensionable Pay
This is your normal salary or wages plus any other taxable benefit specified in your contract as being pensionable (shift allowance, bonuses, contractual overtime, statutory sick pay etc). Pensionable Pay does not include overtime you choose to work (as opposed to overtime you are contracted to do), travelling or subsistence allowance, pay instead of notice, pay instead of holidays, the value of a car or pay received instead of a car.
Pensionable Service
Pensionable Service for the LGPS can be accrued by working for the County Council, Local Authorities or Admitted Bodies (all in a non-teaching capacity). The period of time you pay into the LGPS, whilst working in Local Government, is known as your Pensionable Service (See Also - Total Membership).
Pensions Increase (PI)
Pensions Increase is a figure applied annually (every April) to all active pensions paid by our pensioner payroll. It is a figure intended to off-set the cost of living inflation, so in effect it preserves the value of a pension throughout its time in payment. Pensioners who have not been on pension for 1 full year or people retiring under the age of 55 (bar ill-health) do not qualify for the increase straight away. PI rates for the last couple of years can be found on the Pensioner pages of this website.
Pensions Ombudsman
The Pensions Ombudsman is responsible for investigating complaints and settling disputes which can arise between scheme administrators/employers and scheme members. Pension schemes must follow the Ombudsman’s rulings, but scheme administrators are allowed to challenge the rulings in court if they so wish. Visit the Pensions Ombudsman website for further information.
Personal Pension Plan (PPP)
A Personal Pension Plan is an individual pension arrangement between a person and a financial company of their choosing. Personal Pension Plans generally offer a more flexible approach to pension contributions (offering various 'packages' to meet a wide variety of requirements), whereas an occupational scheme will be much more strictly defined and geared towards accommodating a particular type of contributor/employee.
Preserved Benefits
If you leave your local government employment with over 3 months pensionable service, you will become entitled to a 'Preserved Benefit' (sometimes referred to as 'Deferred Benefits'). You shall receive a monthly pension (and a one-off lump-sum) from this preserved benefit when you reach normal retirement age (or earlier, depending on circumstances). If you would rather not receive a pension from the Devon County Council fund, you may elect to transfer your preserved benefit to another pension scheme (either another occupational scheme or a private pension).
Protected Rights
The lowest amount of benefits that a Contracted-Out Money Purchase Scheme (COMPS) can pay to a member. The amount is worked out by using the money purchase method, with minimum contributions or minimum payments making up the payments to the fund.
Qualifying Service
A period of service accrued in a previous employment which, although not actually transferred to the new pensionable employment, does provide the scheme member with additional benefits (most notably in meeting membership dependent criteria such as the "85 Year Rule"). The service itself does NOT contribute towards pension benefits accrued on this new employment. The majority of Qualifying Service is collected from previous Local Government employments.
Remuneration
In the case of the LGPS, a persons pensionable remuneration is their last 365 days pay (certain payments are pensionable, others aren't - if in doubt, check with your payroll department). Please note, your pensionable remuneration will almost certainly be different (in most cases, lower) to your salary scale point, due to the final 365 days (for the majority) straddling two financial years.
Retail Price Index
This shows the changes in the cost of living. It reflects the movement of prices covering a specific range of goods and services over time. The amount by which pensions are increased annually is based on movement in the Retail Price Index for the 12 months during that year leading up to September.
Stakeholder Pension Scheme
Stakeholder Pension Schemes are designed to be low-charge, flexible and easy to use. They are intended for people who cannot pay into an occupational scheme or a suitable Personal Pension Plan. One of the bonuses of such a scheme is that you can choose how much to pay into your pension as-and-when it suits you. When you eventually come to retire, you will use the money saved up to purchase a suitable pension from a personal pension provider.
State Earnings Related Pension Scheme (SERPS)
If a person in employment does not pay into an occupational or personal pension scheme, they will automatically pay into SERPS. As soon as an employees earnings exceed a lower earnings limit, payments are made to SERPS in the form of additional national insurance contributions. You cannot 'opt-out' of SERPS unless you have an alternative pension scheme to pay into.
State Retirement Age
This currently stands at age 65 for men and age 60 for women. There are changes being introduced with the aim of equalising the retirement age for both men and women to 65 years of age -
Note: women born between the dates mentioned above should check the retirement date calculator on the Pension Service website.
Total Membership
The majority of your total membership is likely to be the period of service with which you have been employed by your local government employer (measured in years and days on a pro-rated basis). There are however several additional ways of accruing scheme membership; most notably via a transfer-in of previous service, paying AVC's and/or buying additional years. In some circumstances you may even be awarded extra scheme membership by your employer, but this is usually the result of a redundancy/interest of efficiency agreement.
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Widow/er/Civil Partner's Pension
A pension paid to the surviving spouse/civil partner of a former pension scheme contributor. The spouse/civil partner's pension is a standard part of the the benefits package open to LGPS members; no extra cost is required to fund this. The April 2008 'New Look' scheme brought in legislation which allows for cohabiting partners (who are eligible to marry or perform a civil ceremony) to nominate their partner as the recipient of benefits payable on your death.
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