Depending on when you joined the Local Government Pension Scheme (LGPS) will depend on how a change of hours affects your pension benefits.

You joined on or before 31 March 2014

If you change your current working hours, your pension benefits built up to 31 March 2014 under the final salary arrangements are still based on your full time equivalent pensionable pay when you leave the scheme (i.e. your final salary).

Changing your hours won’t affect the pre April 2014 part of your pension benefits.

Changes to hours on or after 1 April 2014

Since 1 April 2014 the LGPS has been a defined benefit Career Average Related Earnings (CARE) scheme. Each year you build up pension benefits based on your actual pensionable earnings, including overtime.

Your earnings each year are divided by 49 (accrual rate) and revalued by cost of living adjustments. This provides an updated pension value at the new pension year on 1 April.

Example

Below is an example of what happens to CARE pension benefits when a member changes their working hours. In this example, the member changes their hours from:

  • 30 hours per week in scheme year 1 to  
  • 15 hours per week in scheme year 2.

Scheme year 1

Elizabeth was new to the scheme and started on 1 April 2017. She worked 30 hours a week. Her opening balance  was £0:

2018 Revaluation
DateOpening balancePension built up in yearTotal account 31 March 2018DateCost of living adjustmentUpdated total account 1 April 2018
1 April 2017 £0 £12,250 / 49 = £250 £250 1 April 2018 £250 x 3% £257.50

Scheme year 2

Elizabeth chose to drop her working hours from 30 hours per week to 15 hours per week from 1 April 2018:

2019 Revaluation
DateOpening balancePension built up in yearTotal account 31 March 2019DateCost of living adjustmentUpdated total account 1 April 2019
1 April 2018 £257.50 £6,125 / 49 = £125 £257.50 + £125 = £382.50 1 April 2019 £382.50 x 2% £390.15