Combining Your Benefits
If you already have benefits deferred in the Berkshire Pension Fund in respect of a previous period of employment and you rejoin the pension scheme as an active member you have the option of combining these periods of membership together.
If your salary in your new job is higher than the salary on which your deferred pension benefits are calculated
Under current scheme regulations you have to elect whether or not to combine your two periods of membership together or to keep them separate. Please refer to the various points below before deciding whether to keep your deferred benefits separate from your current employment or to merge the two periods together.
1. Retirement benefits under the Local Government Pension Scheme are calculated using the average pensionable pay for the last year of employment. If you merge your benefits the value of your deferred benefits would be increased.
2. If you elect to keep your benefits separate, the deferred benefits will increase annually in line with inflation. Whilst these increases maintain the value of your deferred benefits you may expect that your pensionable pay in your new employment will increase at a more rapid pace thereby improving your benefits overall.
3. Should you die in service a death grant equal to three times your annual pensionable pay will be paid in respect of your current employment. There would also be a death grant payable in respect of your deferred benefits but if you link your benefits together, the right to a deferred lump sum death grant will not exist.
If your salary in your new job is lower than the salary on which your deferred pension benefits were calculated
If your salary in your new job is lower than the salary on which your deferred pension benefits are calculated please also refer to the various points below before deciding whether to keep your deferred benefits separate from your current employment or to merge the two periods together.
1. Retirement benefits under the Local Government Pension Scheme are calculated using the average salary for the last year of employment. If you merge your benefits and subsequently leave while your pensionable pay is at a lower rate, the value of your deferred benefits would be reduced.
2. If you elect to keep your benefits separate, the deferred benefits will increase annually in line with inflation. Whilst these increases maintain the value of your deferred benefits you may expect that your pensionable pay in your new employment will increase at a more rapid pace and therefore, overtake the value of your increased deferred benefits before leaving your new employment.
3. Should you die in service a death grant equal to three times your annual pensionable pay will be paid in respect of your current employment. There would also be a death grant payable in respect of your deferred benefits but if you link your benefits together, the right to a deferred lump sum death grant will not exist.
Please note you will have 12 months from the date that you rejoin the Berkshire Pension Fund to investigate combining your deferred benefits with your new active job.
Combining Previous Periods of Scheme Membership
(for members with more than 12 months membership)
The LGPS (Miscellaneous) Regulations 2010 were laid before parliament on 25 August 2010 and have come into force from 30 September 2010. The most notable amendment within these Miscellaneous Regulations relate to the combining of previous LGPS membership with the membership currently building up within the Royal County of Berkshire Pension Fund.
Combining LGPS benefits - new rules
Regulation 16 of the LGPS (Administration Regulations 2007 (as amended) has now been amended under the Miscellaneous regulations regarding combining periods of LGPS membership.
If a member leaves the LGPS they are entitled to leave their benefits in the Scheme (known as deferred benefits). If they later re-join the LGPS with another Local Government employer, they may add their previous deferred benefits to the benefits building up in their new employment. This is known as combining benefits.
What are the current rules?
Before 1 October 2010, the ability to combine benefits was restricted in two ways:
• A decision to combine benefits had to be made within the first 12 months of returning to Local Government employment (or such longer period as the employing authority allowed); and
• If you had a deferred benefit held with more than one previous LGPS employer, you could only combine the most recent period of membership with your current membership.
What has changed?
• Under the revised regulations, existing active members will have until 30 September 2011 to combine any period of former Local Government membership with their current membership; and
• Members are now permitted provided that they elect to do so in the first 12 months of their new period of membership. Current active members have, until 30 September 2011 to aggregate membership.
A Frequently Asked Questions leaflet has been produced which contains further information regarding combining previous Local Government membership which can be downloaded here. Members to investigate a transfer of previous Local Government membership before 30th September 2011 must complete form LGS13A and return this to the Berkshire Pensions team.
Concurrent Employment
If you have two or more contracts of employment within the LGPS you may have more than one pension building up at the same time while you do a variety of jobs. This is known as 'concurrent employment'.
How Do I Combine my concurrent benefits?
If you hold two or more employments at the same time and you leave one of them but continue in the other your deferred benefits (which are the benefits accrued in the job that you have left) are automatically merged with your continuing active job.
The formula for calculating the equivalent period of membership that will be merged with your active employment is detailed below:
Membership in job that has ceased X whole-time rate of pay in job which has ceased / whole-time rate of pay in continuing employment
Do I have to concurrently merge my benefits ?
We will automatically merge any concurrent periods of service which you may have. However we will write to you once this has merged together and give the option to reverse this procedure.
What are the disadvantages to concurrently merging?
I have set out below various points that you need to consider before deciding whether to keep your deferred benefits separate from your current employment or to concurrently merge the two periods together.
Pensions Increase
• If you elect to keep your benefits separate, the deferred benefits will increase annually in line with inflation. Whilst these increases maintain the value of your deferred benefits you may expect that your salary in your new employment will increase at a more rapid pace thereby improving your benefits overall.
Death Benefits
• Should you die in service a death grant equal to three times your annual pensionable pay will be paid in respect of your current employment. There would also be a death grant payable in respect of your deferred benefits but if you link your benefits together, the right to a deferred lump sum death grant will not exist.
Redundancy / Efficiency retirement
• If a member is aged 55 or over and they are retired on redundancy grounds their pension benefits can be paid immediately without reduction. If you have combined your membership together your redundancy pension benefits would be based on your entire combined membership within the Berkshire Pension Fund. If you keep your benefits seperate your redundancy pension benefits will only be based on the membership within the job you are being made redundant from and not your whole service.
If you do have concurrent employment within the Berkshire Pension Fund your benefits will be concurrently merged automatically. We will contact you in writing to confirm when this has been finalised.
