Your Annual Benefit Statement 31 March 2024 Explained

Your Annual Benefit Statement 31 March 2024 Explained

Your Annual Benefit Statement is available in your mypension account. If you are already registered to access your online mypension account, you will receive an email when your Statement is ready to view. 

Registering for mypension

If you would like to register for mypension, our online service, a full Registration Guide is available under the mypension section of our website.

Notes for your Active Member Annual Benefit Statement

Personal Information

This section contains information about your membership in the Local Government Pension Scheme (the Scheme) including your current employer, which section of the Scheme you are in and your membership number. If you have more than one membership with the Tyne and Wear Pension Fund (TWPF), your membership ID number identifies the job it relates to.

Your Standard Benefits at March 2024

This is an estimate of the values of your benefits at 31 March 2024 which is calculated as follows:-

Final Salary benefits - pre 2014 pension benefits

·     Final salary benefits (pre 2014 element of your pension benefits) will be based on final pay at leaving the Scheme and could be higher or lower than those quoted. We have used your final salary at 31 March 2023 for the purposes of the Statement.

·     Final salary benefits will only be shown for a member who joined the Scheme before 1 April 2014 or has completed a transfer from a qualifying Scheme and all or part of the transfer value bought final salary membership in the Scheme.

Career Average Revalued Earnings Pension (CARE) - post 2014 pension benefits

·       Your CARE pension is based on your pensionable earnings each year. If you were on reduced contractual pay or no pay due to sickness or relevant child related leave for any part of the year ending 31 March, Assumed Pensionable Pay (APP) has been included in the pensionable pay figure for that period.

·       APP is a notional pay figure that means your pension is not affected if your pay is reduced when you are absent. Your pension will be based on Assumed Pensionable Pay during a period of reserve forces leave, relevant child related leave and when your pay is reduced because of sickness or injury.

·     Member CARE benefits (post 2014 element of your pension benefits) include revaluation up to the previous 1 April only. This is an increase of 10.1% from 1 April 2023 which is included in your 2024 statement.

·     A transfer of previous pension rights will be reflected in your figures only if it was completed by 31 March 2024. A transfer completed after this date will be included in your statement next year.

·     Main section scheme - you are automatically enrolled into the main section and you will pay the normal contributions and your pension is based on 1/49^th of your pensionable pay

·       50/50 scheme - you can opt to pay half your normal contributions and build up half your normal pension. This option allows you to remain in the Scheme, building up valuable pension benefits. Your pension is based on 1/98^th of your pensionable pay. Joining the 50/50 section provides an alternative to opting out of the scheme in times of financial hardship. A 50/50 option form is available on the TWPF website.

All Membership

·     The figures have been adjusted to take account of any reduction due to a pension sharing order and/or an annual allowance scheme pays debit. The pension sharing debit / annual allowance scheme pays debit has is assuming that you retire at your Normal Pension Age (NPA). The debit will be adjusted if you retire at an earlier or later date to account for the longer or shorter recovery period.

·     Members must have 2 years Scheme membership to qualify for a pension unless you have transferred in from another pension provider. Benefits at 31 March 2024 are provided for information only. If you leave with less than two years' membership, you will not qualify for benefits and will generally be able to opt for a refund of contributions.

Projected value of Standard Benefits

This shows your projected benefits at your Normal Pension Age, this date is set by the Scheme rules. Currently, this date is the same as your State Pension Age (SPA). Your normal pension age may change in the future if the Government changes State Pension ages. Please note the following:-

·       If you are over age 55, the current rules allow you to retire before your normal  pension age and a reduction would be applied to your pension benefits. This is not reflected in your statement. The reduction percentages can be found on our Planning to Retire Early webpage.  Please note, the earliest retirement date is expected to change from age 55 to age 57 from April 2028. You can find further information on our website regarding the 55 to 57 increase.

·       The projection is based on the section of the Scheme you were in on 31 March and it is assumed this remains constant until your Normal Pension Age.

·       Future wage inflation or future pensions increases cannot be taken into account in the projections. 

·       You can choose to retire after your Normal Pension Age and your pension benefits would include late retirement increases. You must receive payment of your benefits before age 75. A late retirement increase has been applied to any projected final salary benefits where your normal pension age is over 65. The late retirement increase is based on the current rules, which may be different when you take your benefits.

·       For members who have already passed their normal pension date, we cannot show you a projection as we do not know when you intend to retire. If you have a date in mind, you can use the online pension calculator in your mypension account to calculate your own estimates which will give you an idea of how much you will receive at your preferred retirement date.

Exchanging pension for lump sum

The Scheme allows you to increase your lump sum by reducing your annual pension. Assuming everything remains the same, the Statement shows an estimated projected maximum lump sum you could receive at normal pension age. It also shows the reduced pension amount. These values are subject to HMRC's tax limits.

Death benefits

·     If you die when you are still paying into the Scheme, a lump sum death grant of three times your annual rate of Assumed Pensionable Pay is paid.

·     Assumed Pensionable Pay is the average pay you receive and is based on three months' pay up to your date of death.

·     It does not matter how long you have been a member of the Scheme, provided you are under age 75 at the date of death.

However, if you also have a deferred benefit and/or a pension in payment from a previous period of membership of the Scheme, the lump sum death grant paid is the greater of:

·       the total of any lump sum death grants payable from the deferred and/or pensions in payment

·       three times your assumed pensionable pay at the date you die

The Tyne and Wear Pension Fund makes the final decision on who will receive any death grant. If you have made a 'Death Grant Nomination' we will take into account your wishes. If you have not yet made a nomination, you can do so in your mypension account. Please make sure that this information is kept up to date.

Survivor benefits

Any survivor final salary benefits quoted are based on current pay and no pay inflation has been assumed.  Survivor CARE benefits include increases up to the previous 1 April only. If you are single, there will be no survivor pension (other than to an eligible child) payable if you are not survived by an eligible cohabiting partner.

The total survivor pension, following a death in service, is made up of:

• the final salary survivor pension accrued up to 31 March 2014 (if applicable) including any purchased added years or additional regular contributions that include a survivor's benefit.
• and the survivor benefits due under the CARE Scheme from 1 April 2014 (if you remain an active member until your normal pension age and your CARE pensionable pay remains constant), including any enhancement.

The survivor benefit payable to your surviving spouse or civil partner is based on all Scheme membership, however the survivor benefit payable to:

• an eligible cohabiting partner will not include any membership before 6 April 1988 (unless you made an election before 1 April 2014 to pay for some or all of that membership to count
• a widow of a male member who married after leaving the Scheme, a survivor of a same sex marriage if the marriage occurred after leaving, or a civil partner of a post leaving civil partnership will not include any pre-6 April 1978 membership
• a widower of a female member who married after leaving will not include any pre-6 April 1988 membership
• An eligible cohabiting partner is a partner you are living with who, at the date of your death, has met all of these conditions for a continuous period of at least two years:

• you and your cohabiting partner are, and have been, free to marry each other or enter into a civil partnership with each other, and
• you and your cohabiting partner have been living together as if you were a married couple or civil partners, and
• neither you nor your cohabiting partner has been living with someone else as if you / they were a married couple or civil partners, and
• either your cohabiting partner is and has been dependent on you, or you are and have been financially interdependent on each other.

A childs pension may also be payable in the event of your death providing they are your child, an adopted child, a stepchild or a child accepted by the deceased member as a member of the family who was dependent on the member at the date of death.

An eligible child must also be:

• under age 18, or aged under 23 and in full-time education or vocation training. Your pension fund can continue to treat a child as an eligible child even of there has been a break in full-time or vocational training, or
• under age 23 and unable to engage in gainful employment because of physical or mental impairment, or
• over age 23, unable to engage in gainful employment because of permanent physical or mental impairment and the child was dependent on the member at the date of death because of that impairment. An independent registered medical practitioner must give their opinion on whether the impairment is likely to be permanent.

Tax Controls and your Pensions

HMRC set certain limits on the total amount of contributions you can make into all pension arrangements and receive tax relief on, and on the pension savings you can have before you become subject to a tax charge.

The values shown on your Statement are for that membership in the Tyne and Wear Pension Fund only. It is your responsibility to check your tax position.