If your pay reduces, this could reduce the value of your final salary benefits. There are protections in place to protect you if this happens. In certain circumstances, you can choose to have your final pay calculated as the average of any three consecutive years ending on 31 March. You will have this option if:
- your pay reduces because you move to a job with less responsibility
- your pay reduces as a result of a job evaluation exercise or equal pay exercise
- your pay reduces because the pensionable pay specified in your contract changes – based on the definition of pensionable pay before 1 April 2014, and
- that pay reduction happens less than ten years before you leave the LGPS.
You will have the same protection if your pay is not reduced, but the increases to your pay are restricted.
You cannot make use of this protection if your pay is reduced at the end of a period when your pay was temporarily increased. You also cannot use this protection if your pay reduced when you took flexible retirement.
You must tell your pension fund that you want to take up this option at least one month before you leave the LGPS.
Members whose pay reduced before 1 April 2008 may have been given a certificate of protection. This offered similar protection in a similar way. Certificates of protection do not protect members leaving the Scheme now because more than 10 years have passed since the pay reduction.
