· Web viewAs the member started after 01 April 2014, you do not have to provide a 2008 definition of final pay. However, if the member has transferred in earlier LGPS benefits,

East Riding Pension Fund

Example Leaver Forms 2015/16

Training Guide

Prepared by: Simon Goddard

Version: 1.1

ERPF Leaver Form Examples 2015/16 Page 1

Contents

Introduction…………………………………………………………………………………………………..3

Example 1 – David Beckham (Basic Full-Time)……………………………………………….4

Example 2 – Victoria Beckham (Basic Part-Time)…………………………………………..6

Example 3 – Brooklyn Beckham (Change in FTE pay)……………………………………..8

Example 4 – Romeo Beckham (Assumed Pensionable Pay)……………………………10

Example 5 – Cruz Beckham (Not a Whole Year)…………………………………………….12

Example 6 – Harper Beckham (Casual)………………………………………………………….14

Example 7 – Tom Cruise (Strike Break)………………………………………………………….16

Example 8 – Katie Holmes (Sessional)……………………………………………………………18

Example 9 – Suri Holmes (Overtime)…………………………………………………………….20

Example 10 – Susan Boyle (Term Time)…………………………………………………………22

Example 11 – Jennifer Lopez (Maternity)………………………………………………….……24

Example 12 – Simon Cowell (Death in Service)……………………………………………….26

Frequently Asked Questions…………………………………………………………………………..28


INTRODUCTION

With the new LGPS regulations coming into force from 01 April 2014, the East Riding Pension Fund has had to revise all of its literature and forms to accommodate the changes. This document is simply to give you some examples on how to fill in the new leaver form.

On the East Riding Pension Fund website, there is a document going into further detail about each section of the form. The website www.lgpsregs.org has the employers Payroll and HR guides which will give further information.

The amount of situations that an employer can come across would be endless – these examples are just to give you guidance in certain situations to see how each part of the form should be completed. This guide is only to offer assistance in how to complete the payroll page of the leaver form.

Also, this guide can only tell you what information is required – the East Riding Pension Fund has no access to your payroll records so cannot tell you where to gain this information from.

Due to the fact that the East Riding Pension Fund are not payroll experts, the Contracted Out earnings sections are not completed in these examples. Also, I have assumed that there are no Multiple Employments.

This document is designed to talk the employers through the leaver form for anybody who left between 01 April 2015 and 31 March 2016. If the member left in the 2014/15 tax year, please complete the form as explained however leave the “1 April 2015 to DOL” fields blank.


Example 1 – David Beckham (Basic Full Time)

David ceased employment on 30 September 2015. He works full-time and is on an annual salary of £24,000. No extra’s in his pay. No increases in the final 24 months. Contribution rate of 6.5%.

To begin, we need to work out his monthly wage and contribution rate:

Monthly salary = £24,000 / 12 = £2,000.00

Contributions = 6.5% of £2,000 = £130.00

So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£130.00 x 6) = £780.00 and the amount for 1 April 2014 to 31 March 2015 will be (£130.00 x 12) = £1,560

The “Main Section Cumulative Pensionable Pay/Assumed Pensionable Pay” for 1 April 2015 to DOL will be

(£2,000 x 6) = £12,000.

and for 1 April 2014 to 31 March 2015 will be

(£2,000 x 12) = £24,000

The Final Years Pay for the 2008 definition will run from 01/10/2014 to 30/09/2014.

The one year’s full time equivalent final pay will be £24,000 as there were no pay changes in the 12 months and the Actual rate of full-time equivalent pay on final day of membership will also be £24,000.


Employee leaver form (continued)(Post 31 March 2014 leavers)

Employee’s full name: David Beckham

Payroll Number: NI Number:

Pay and Contribution Details

Contribution Details

BASIC pension contributions1 April 2015 to DOL £780.00

1 April 2014 to 31 March 2015 £1560.00Contracted out earnings between the lower and upper limits

(up to 3 years needed if member has been in the scheme for less than 2 years at date of termination)

Current Tax Year £ Tax Year 2014/2015 £

Tax Year 2013/2014 £ Career Average Re-valued Earnings - CARE (2014 Scheme )

Main Section Cumulative Pensionable Pay/Assumed Pensionable Pay1 April 2015 to DOL £12000.00

1 April 2014 to 31 March 2015 £24000.00

50/50 Section Cumulative Pensionable Pay/Assumed Pensionable Pay

1 April 2015 to DOL £

1 April 2014 to 31 March 2015 £

Assumed Pensionable Pay for Ill Health Retirements or Death in Service Cases £ Multiple Employments

If the member has other pensionable employment(s) with you, which are continuing, please provide the full time equivalent pay/salary in each post at the date of leaving this post

Job Title: Pay: £

Job Title: Pay: £

Final Pay (2008 definition) Only use this section if member started prior to 1 April 2014

Final Years Pay from : 01/10/2014 to : 30/09/2015

Please state one year’s full time equivalent final pay: £24000.00

Actual rate of full time equivalent pay/salary on final day of membership: £24000.00Contractual Hours for the Final Year (please complete if member started prior to 1 April 2014)

From ToActual hours worked

(plus formula if applicable)Enter ‘C’ if casual

FTE Hours

01/10/2014 30/09/2015 37 37

Additional Contributions (where relevant) Period Contributions

Added Years Contributions1 April 2015 to DOL £ 1 April 2014 to 31 March 2015 £

Additional Regular Contributions (ARCs)1 April 2015 to DOL £ 1 April 2014 to 31 March 2015 £

Additional Pension Contributions (APCs)1 April 2015 to DOL £ 1 April 2014 to 31 March 2015 £


Example 2 – Victoria Beckham (Basic Part Time)

Victoria ceased employment on 19 November 2015. She works 18.50 hours a week (half-time) and is on a full-time equivalent annual salary of £22,000. No extra’s in her pay. No increases in the final 24 months. Contribution rate of 5.5%.

To begin, we need to work out her monthly wage and contribution rate:

Monthly salary = (£22,000 x 18.50/37.00) / 12 = £916.67

Contributions = 5.5% of £916.67 = £50.42

So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£50.42 x 7) + (£50.42 x 19/30) = £384.87 and the amount for 1 April 2014 to 31 March 2015 will be (£50.42 x 12) = £605.04


(£916.67 x 7) + (£916.67 x 19/30) = £6,997.25.


(£916.67 x 12) = £11,000.04





Employee’s full name: Victoria Beckham










1 April 2014 to 31 March 2015 £11000.04



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

20/11/2014 19/11/2015 18.50 37.00






Example 3 - Brooklyn Beckham (Change in FTE pay)

Brooklyn ceased employment on 30 June 2015. He works full-time and is on an annual salary of £18,000. No extra’s in his pay. He increased from £15,000 to £18,000 on 01 January 2015. Contribution rate of 5.8%


Monthly salary before increase = £15,000 / 12 = £1,250.00


Monthly salary after increase = £18,000 / 12 = £1,500.00


So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£87.00 x 3) = £261.00 and the amount for 1 April 2014 to 31 March 2015 will be (£72.50 x 9) + (£87.00 x 3) = £913.50.


(£1,500.00 x 3) = £4,500.00.


(£1,250.00 x 9) + (£1,500.00 x 3) = £15,750.00


The one year’s full time equivalent final pay will be (£15,000 x 6/12) + (£18,000 x 6/12) = £16,500 and the Actual rate of full-time equivalent pay on final day of membership will be £18,000.



Employee’s full name: Brooklyn Beckham










1 April 2014 to 31 March 2015 £15750.00



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

01/07/2014 30/06/2015 37 37






Example 4 - Romeo Beckham (Assumed Pensionable Pay - APP)

Romeo ceased employment on 31 August 2015. He works 30 hours a week and is on an annual full-time equivalent salary of £21,000. No extra’s in his pay. A pay award, increasing his pay from £20,000 to £21,000 was implemented from 01 January 2015.However, due to illness, he was on half-pay for the period 01 June 2014 to 31 December 2014. The member then went onto nil pay until he left. Contributions rate of 5.8%


Monthly salary up to 31 May 2014 = (£20,000 x 30.00/37.00) / 12 = £1,351.35

Contributions = 5.8% of £1,351.35 = £78.38

Monthly salary on half pay = (£20,000/2 x 30.00/37.00) / 12 = £675.68


The APP figure used for the ill health period is worked out as the last three months the member was paid their full wage (i.e. March, April and May 2014) averaged out and then applied into the half pay period. Therefore, the monthly APP figure will be ((£1,351.35 + £1,351.35 + £1,351.35) / 3) = £1,351.35. For the APP figure, you do not apply the pay award to these figures.

So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be nil, as the member was on nil pay and the amount for 1 April 2014 to 31 March 2015 will be (£78.38 x 2) + (£39.13 x 7) = £430.67.


(£1,351.35 x 5) = £6,756.75. (Five months on APP)


(£1,351.35 x 2) + (£1,351.35 x 10) = £16,216.20 (Two months on normal pay and ten months on APP)


The one year’s full time equivalent final pay will be (£20,000 x 4) + (£21,000 x 8) = £20,666.67 as under the 2008 regulations, the final years pay is calculated as if the member was at work. Also, the Actual rate of full-time equivalent pay on final day of membership will be £21,000.



Employee’s full name: Romeo Beckham










1 April 2014 to 31 March 2015 £16216.20



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

01/09/2014 31/08/2015 30 37






Example 5 – Cruz Beckham (Not a Whole Year)

Cruz ceased employment on 31 December 2015. He started employment on 01 March 2015. He works 12 hours a week and is on an annual full-time equivalent salary of £36,000. No extra’s in his pay. No increases in salary. Contribution rate of 5.5%


Monthly salary = (£36,000 x 12.00/37.00) / 12 = £972.97


So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£53.51 x 9) = £481.59 and the amount for 1 April 2014 to 31 March 2015 will be (£53.51 x 1) = £53.51


(£972.97 x 9) = £8,756.73.


(£972.97 x 1) = £972.97

As the member started after 01 April 2014, you do not have to provide a 2008 definition of final pay. However, if the member has transferred in earlier LGPS benefits, it may be that we need to write back and request this figure.



Employee’s full name: Cruz Beckham










1 April 2014 to 31 March 2015 £972.97



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £


Final Years Pay from : to :

Please state one year’s full time equivalent final pay: £

Actual rate of full time equivalent pay/salary on final day of membership: £ Contractual Hours for the Final Year (please complete if member started prior to 1 April 2014)



FTE Hours






Example 6 – Harper Beckham (Casual)

Harper ceased employment on 31 October 2015. She worked on a casual basis. Her pays for the final 24 months were:

November 2013 – £728 March 2014 - £45 July 2014 - £0

December 2013 – £197 April 2014 - £337 August 2014 - £825

January 2014 – £1045 May 2014 - £728 September 2014 - £218

February 2014 - £111 June 2014 - £211 October 2014 - £450



January 2015 – £432 May 2015 - £0 September 2015 - £77

February 2015 - £88 June 2015 - £285 October 2015 - £407

Her FTE rate of pay was £24,000 with no increases in the final 24 months. Contribution rate is 6.5%

Working backwards in this example, the “Main Section Cumulative Pensionable Pay/Assumed Pensionable Pay” for 1 April 2015 to DOL will be £1,802.00 and for 1 April 2014 to 31 March 2015 will be £3,650.00

So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be 6.5% of £1,802.00 = £117.13 and the amount for 1 April 2014 to 31 March 2015 will be 6.5% of £3,650.00 = £237.25

Why do you not include the April 2014 payment? For most payroll systems, casuals are paid a month in arrears. This means that the £337 paid in April 2014 will be for work done in March 2014. Therefore, this figure would be used in the 2013/14 tax year.





Employee’s full name: Harper Beckham










1 April 2014 to 31 March 2015 £3650.00



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

01/11/2014 31/10/2015 Casual






Example 7 – Tom Cruise (Strike Break)

Tom ceased employment on 15 August 2015. He works 5 hours a week and is on an annual full-time equivalent salary of £14,000. No extras in his pay. No increases in salary. However, he was on strike on 10 November 2014 (and did not elect to pay it back). Contribution rate of 5.5%


Monthly salary = (£14,000 x 5.00/37.00) / 12 = £157.66


So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£8.67 x 4) + (£8.67 x 15/31) = £38.88 and the amount for 1 April 2014 to 31 March 2015 will be (£8.67 x 12) = £104.04 – less the contributions for the strike day, which I have calculated as (£8.67 x 1/30 = £0.29) so the amount of contributions is £103.75.


(£157.66 x 4) + (£157.66 x 15/31) = £706.93.


(£157.66 x 12) = £1,891.92 – less the pay for the strike day, which I have calculated as (£157.66 x 1/30 = £5.26) so the amount of pay is £1,886.66

If the member took out an APC contract to buy back the “lost” pension, then the calculation is still exactly the same. This is because the APC contract adds back on the lost pension, so if you were to include the lost pay figure, the member would be getting this portion twice.



If there was a pay increase in the final 12 months, please see the “Frequently Asked Questions” section for more information about how the above calculation would change.



Employee’s full name: Tom Cruise










1 April 2014 to 31 March 2015 £1886.66



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

16/08/2014 15/08/2015 5 37






Example 8 – Katie Holmes (Sessional)

Katie ceased employment on 24 September 2015. She worked as a canvasser. Her pays for the final 24 months were:

October 2013 – £0 February 2014 - £45 June 2014 - £0



January 2014 - £0 May 2014 - £0 September 2014 - £0

October 2014 – £0 February 2015 - £45 June 2015 - £10



January 2015 - £0 May 2015 - £0 September 2015 - £120

Contribution rate is 5.5%

Working backwards in this example, the “Main Section Cumulative Pensionable Pay/Assumed Pensionable Pay” for 1 April 2015 to DOL will be £130.00 and for 1 April 2014 to 31 March 2015 will be £755.00.

The “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be 5.5% of £130.00 = £7.15 and the amount for 1 April 2014 to 31 March 2015 will be 5.5% of £755.00 = £41.53

Why do you not include the April 2015 payment in the 2015/16 year? For most payroll systems, sessionals are paid a month in arrears. This means that the £50 paid in April 2015 will be for work done in March 2015. Therefore, this figure would be used in the 2014/15 tax year.


The one year’s full time equivalent final pay will be £485. Sessionals do not have an hourly or annual rate of pay – they are simply paid for the work they do irrespective of how long it takes them. You do not need to quote an Actual rate of full-time equivalent pay on final day of membership.



Employee’s full name: Katie Holmes










1 April 2014 to 31 March 2015 £755.00



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £




Actual rate of full time equivalent pay/salary on final day of membership: £ Contractual Hours for the Final Year (please complete if member started prior to 1 April 2014)



FTE Hours

25/09/2014 24/09/2015 Sessional






Example 9 – Suri Holmes (Overtime)

Suri ceased employment on 31 May 2015. She works full-time and is on an annual salary of £30,000. No extra’s in her pay. No increase in pay in the final year. Contribution rate of 6.5%. She did work non-contractual overtime in her final years. Amounts as followed were paid:

September 2013 - £100 March 2014 - £65 August 2014 - £80

December 2013 - £75 April 2014 - £100 February 2015 - £200

January 2014 - £175 May 2014 - £25 May 2015 - £200

To begin, we need to work out her monthly wage and contribution before overtime:

Monthly salary = £30,000 / 12 = £2,500.00


So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£162.50 x 2) plus the overtime paid for May 2015 = £325.00 + £13.00 = £338.00

The amount for 1 April 2014 to 31 March 2015 will be (£162.50 x 12) plus the overtime paid for May 2014, August 2014 and February 2015 = £1,950.00 + £19.83 = £1,969.83.


(£2,500 x 2) + (£200 Overtime for May 2015) = £5,200.00.


(£2,500 x 12)+ (£25 + £80 + £200 Overtimes) = £30,305.00

Why did you not include April 2014’s Overtime? As the scheme regulations changed on 01 April 2014 to make overtime pensionable, only work done from this date will be pensionable. Therefore, for most payroll systems, overtime paid at the end of April will be for work done in March – when it was not pensionable.



Remember – do not include the non contractual overtime in the 2008 Final Pay figures.



Employee’s full name: Suri Holmes










1 April 2014 to 31 March 2015 £30305.00



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

01/06/2014 31/05/2015 37 37






Example 10 – Susan Boyle (Term Time)

Susan ceased employment on 31 August 2015. She works 18.50 hours a week on a term time formula of 190/225. She is on a full-time equivalent pay of £18,000, which increased to £19,000 on 01 April 2015. No extra in her pay. Contribution rate of 5.5%.

To begin, we need to work out her monthly wage and contribution rate:

Monthly salary before increase= (£18,000 x 18.50/37.00 x 190/225) / 12 = £633.33


Monthly salary after increase= (£19,000 x 18.50/37.00 x 190/225) / 12 = £668.52


So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£36.77 x 5) = £183.85 and the amount for 1 April 2014 to 31 March 2015 will be (£34.83 x 12) = £417.96.


(£668.52 x 5) = £3,342.60.


(£633.33 x 12) = £7,599.96

What about the term time formula adjustment? If you are paying this, then simply add the adjustment payment onto the Main Section pay figure – you do not need to include it in the 2008 pay figures.


The one year’s full time equivalent final pay will be:

((£18,000 x 190/225 x 7/12) + (£19,000 x 190/225 x 5/12)) = £15,551.85.

The Actual rate of full-time equivalent pay on final day of membership will be (£19,000 x 190/225) = £16044.44.



Employee’s full name: Susan Boyle










1 April 2014 to 31 March 2015 £7599.96



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

01/09/2014 31/08/2015 18.50 x 190/225 37






Example 11 – Jennifer Lopez (Maternity)

Jennifer ceased employment on 15 April 2015. She works 10 hours a week since returning from maternity on 01 October 2014. Prior to this, she was working full-time. She took the full maternity leave (9 months paid/3 months unpaid). She was on a full-time equivalent pay of £20,000. No increases in her last two years pay and no extra’s. Contributions rate of 5.5% and did not elect to buy back unpaid leave.

Looking at her history, it can be broken down as follows:

01 October 2014 to 15 April 2015 – Part time monthly wage01 July 2014 to 30 September 2014 - Nil pay01 October 2013 to 30 June 2014 - Maternity payPrior to 01 October 2013 - Full time monthly wage

Her monthly pay and contribution amount for each of those periods is:

01 October 2014 to 15 April 2015 – (£20,000 x 10.00/37.00) / 12 = £450.45. Contributions = £24.7701 July 2014 to 30 September 2014 - Nil pay01 October 2013 to 30 June 2014 - Maternity payPrior to 01 October 2013 - £20,000 / 12 = £1,666.67. Contributions = £91.67

The APP figure used for the paid maternity period is worked out as the last three months the member was paid their full wage (i.e. July, August and September 2013) averaged out and then applied into the maternity pay period. Therefore, the monthly APP figure will be ((£1,666.67 + £1,666.67 + £1,666.67) / 3) = £1,666.67

So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£24.77 x 15/30) = £12.39 and the amount for 1 April 2014 to 31 March 2015 will be (£24.77 x 6) = £148.62 plus the contributions deducted from her maternity pay in April 2014 to June 2014.

The “Main Section Cumulative Pensionable Pay/Assumed Pensionable Pay” for 1 April 2015 to DOL will be (£450.45 x 15/30) = £225.23.and for 1 April 2014 to 31 March 2015 will be (£450.45 x 6) + (Nil for July to September) + (APP for April to June - £1,666.67 x 3) = £7,702.71





Employee’s full name: Jennifer Lopez





1 April 2014 to 31 March 2015 £148.62 plusContracted out earnings between the lower and upper limits





1 April 2014 to 31 March 2015 £7702.71



1 April 2014 to 31 March 2015 £



Job Title: Pay: £

Job Title: Pay: £







FTE Hours

16/04/2014 30/09/2014 37 37

01/10/2014 15/04/2015 10 37Additional Contributions (where relevant) Period Contributions





Example 12 – Simon Cowell (Death in Service)

Simon died in service on 28 October 2015. He worked 25 hours a week on a full-time equivalent salary of £17,000. He was receiving a regular £100 per month for weekend work. No increase in pay in the last two years. Contribution rate of 5.5%. No half pay for sickness before death.

To begin, we need to work out his monthly wage and contribution:

Monthly salary = (£17,000 x 25.00/37.00) / 12 = £957.21 plus the regular £100.00 = £1,057.21

Contributions = 5.5% of £1,057.21 = £58.15

So, for the leaver form, the “BASIC pension contributions” paid in tax year 1 April 2015 to DOL will be (£58.15 x 6) + (£58.15 x 28/31) = £401.42 and the amount for 1 April 2014 to 31 March 2015 will be (£58.15 x 12) = £697.80


(£1,057.21 x 6) + (£1,057.21 x 28/31) = £7,298.16.


(£1,057.21 x 12) = £12,686.52

As the member died in service, the “Assumed Pensionable Pay for Ill Health Retirements and Death in Service” needs completing. The APP is worked out averaging the last three full months (July, August and September) and then up-rating this figure to a full year.

(£1,057.21 + £1,057.21 + £1,057.21) / 3 = £1,057.21

£1,057.21 x 12 = £12,686.52


The one year’s full time equivalent final pay will be (£17,000 + (12 x £100.00)) = £18,200 as there were no pay changes in the 12 months and the Actual rate of full-time equivalent pay on final day of membership will also be £18,200.



Employee’s full name: Simon Cowell










1 April 2014 to 31 March 2015 £12686.52



1 April 2014 to 31 March 2015 £

Assumed Pensionable Pay for Ill Health Retirements or Death in Service Cases £12686.52Multiple Employments


Job Title: Pay: £

Job Title: Pay: £







FTE Hours

29/10/2014 28/10/2015 25 37






Frequently Asked Questions

1. What about the recent non-consolidated pay award?

In the 2014/15 pay award, an additional payment was also made to staff. This was a pensionable figure so the question is – where should this be included in the leaver form? The figure needs adding into both the CARE pay figures and the 2008 definition pay figure.

2. What about the strike days where there is a pay award in that year?

If the member had a pay increase in the final 12 months, you will need to apply the 2008 regulations to the final years pay calculation. For example, if a member was on £16,000 (FTE) for six months of the final year and £18,000 (FTE) for the other six months AND the member was not on strike or bought back the strike day, then the one year’s final pay calculation will be:

(£16,000 x 6/12) + (£18,000 x 6/12) = £17,000

If the member had a strike break in the first half of the year AND did not buy it back, then the calculation will be:

((£16,000 x 5/12) + (£16,000 x (30/31)/12)) + ((£18,000 x 6/12) = £7,956.99 + £9,000.00 = £16,956.99

However, this is only for 364 days of the final year, so you will need to up-rate this to 365 days:

£16,956.99 x 365/364 = £17,003.58

If the member had a strike break in the second half of the year AND did not buy it back, then the calculation will be:

(£16,000 x 6/12) + ((£18,000 x 5/12) + (£18,000 x (30/31)/12)) = £8,000.00 + £8,951.61 = £16,951.61

However, this is only for 364 days of the final year, so you will need to up-rate this to 365 days:

£16,951.61 x 365/364 = £16,998.18

3. Why do we not include the absence period if the member has bought it back with an APC?

When an employee takes out an APC, this is then added into their benefits as an “extra pension amount”. For example, if you quote that somebody has had £100 of lost pay then they have lost £2.04 of annual pension. This is simply worked out as (£100/49).


Pensions will then add this into the members pension account as an “additional amount”. If you were to also include the £100 of lost pay in the leaver form, then they will be receiving the £2.04 twice – once in the normal benefits and also with the additional amount pension have added into their pot.

4. Do you always include any extras in the APP calculation?

Not always. If there are any regular, monthly payments that the member receives, these are included in the three month averaging. If there are any single or annual payments made, these are not included in the averaging out.

For example: A monthly paid employee has received the following pensionable pay in the three complete months prior to the relevant event.

Month 1 - £1,400

Month 2 - £2,500 (including a £1,000 regular bonus and £100 overtime)

Month 3 - £1,400

The calculation of APP is as follows:

Annual rate of APP = (£1,400 + £1,500 + £1,400)/3 *12) = £17,200

Note that the £1,000 bonus is removed prior to the averaging and grossing up calculation. As to whether you then add these figures only the annual APP figure is an employer decision and something you must make a policy on. The ERPF does not need to know this policy however employers must make a decision on this to ensure it is consistent across all cases.

5. Do you include any pay awards in the APP calculation?

Once members benefits are worked out using the APP, pay awards are not included in this figure. So, for example, if a member goes onto reduced pay on 01 January 2015 and a pay award is arranged from 01 April 2015, this is not applied to the members APP calculation.

The regulations state that, for those staff on long term sick, the APP is increased in line with inflation (not paywards) once a member crosses their second 31 March whilst on reduced/nil pay. So, in the above example, the APP calculation would be increased in line with inflation from 01 April 2016.

6. I have an employee who went off on full pay sickness for a period of time but only received their basic pay and not the extras. When they go down to half pay, can I use a three month average when they were receiving extras?

The regulations state that you must use the three months preceding a reduction in their contractual pay. Therefore, here it would depend on whether those extras were contractual or not. For example, a member goes onto full pay (without extras) on 01 June. They then go down to half pay on 01 December.

If the extras are contractual, then you would use March, April and May pay figures and apply the APP from June onwards.

If the extras are not contractual, then you would use September, October and November pay figures and apply the APP from December onwards.


Documents

· Web viewAs the member started after 01 April 2014, you do not have to provide a 2008 definition of final pay. However, if the member has transferred in earlier LGPS benefits,