Pension Magazine Issue 01 by Tim Bol

Magazine

Issue: 01

Regulation Changes

Payment of additional contributions to cover increased survivor benefits for nominated cohabiting partners

The retirement process

6 steps to understanding how your pension works

Contents Issue: 01

Introduction

Meet the team

Scheme Overview

What benefits will be payable if I die? Earliest retirement age changes / Regulation changes

Your Pension in retirement

Receiving Your Pension / When can I retire

The retirement process

White Water

Increasing your benefits

Did you know?

Transfer-in Procedure

Investment update

Shropshire County Pension Fund .co.uk Please keep us informed

Frequently Asked Questions

PENSIONS GLOSSARY

04 This magazine was up-to-date at the time of publication in March 2010. This leaflet is for general use and cannot cover every personal circumstance nor does it cover specific protected rights that apply to a very limited number of employees. In the event of any dispute over your pension benefits, the appropriate legislation will prevail as this leaflet does not confer any contractual or statutory rights and is provided for information purposes only.

Introduction Welcome to the first issue of our pensions magazine. Even though we only had a new Scheme introduced in April 2008 we have had quite a few regulation changes over the past couple of years and can appreciate it can be complicated for members to keep up to date with scheme rules. You will find a wide range of articles in this issue and they should provide you with a brief overview of all the changes and issues we feel that may be of interest to you as an employee member of the Local Government Pension Scheme. The pension’s industry is full of jargon but we have tried hard to ensure we don’t use it. However, some terms are difficult to change so we have included a small glossary at the back of the magazine. We hope you find this magazine useful and informative. If you would like any personal quotations or would like to talk to a member of the team please call our Helpline on 01743 252130 or pop into the Shirehall, we love to meet our members face to face. Contact details can be found at the back of this magazine. Enjoy the magazine! The Local Government Pension Scheme The Local Government Pension Scheme (the Scheme) is a public sector pension scheme for the majority of Local Government employees (teachers and firefighters have alternative schemes). The Scheme is set up by law, and benefit levels are set in legislation passed by Parliament. The current set of regulations governing the Scheme were introduced in April 2008. It is a contracted - out pension scheme which means it meets the requirements of both Department of Works and Pensions and Her Majesty’s Revenue and Customs, because it provides benefits at least equal to the value of the state scheme and within limits set by Parliament. The Shropshire County Pension Fund Shropshire Council is the administering authority for the Shropshire County Pension Fund. The Fund has over 70 different employers whose staff are members of the Scheme. The Pension Fund is managed by the Pension Committee. This consists of elected representatives from the various councils, unions and a pensioners’ representative.

Meet the Team Here at Pension Services we deal with all pension related matters for scheme members, pensioners and employers. Based at the Shirehall in Shrewsbury, we work in four groups – Two Administration Teams, a Communication Team and an Investment Team. The Administration Teams are responsible for looking after you whilst you are a member of the Scheme. Their duties include calculating and paying retirement benefits, providing all types of quotation to members, setting up new starters and processing leavers as well as processing transfers in and out of the scheme. They are kept very busy. The Communications Team works to the objective of communicating in a comprehensive and effective manner to all employers and employees. We have over 70 employers in the Shropshire Fund and approximately 15,000 employee members, 9,300 deferred members and 7,500 pensioners. They also run our Helpdesk which will respond to phone and email enquires, but also offers a drop in service where you can call in and speak to a member of the team between 9am and 5pm Monday to Thursday and 9am to 4pm on a Friday. No appointment is necessary. If you call at the Shirehall, just ask to speak to someone at Reception. Our full contact details are featured at the end of this magazine. The Investments Team are responsible for the administration and accounting procedures required to monitor the activities of the Fund’s external investment managers. They put into effect the Fund’s Corporate Governance Policy, prepare Fund accounts and administer the quarterly committee meetings. We welcome any comments or ideas which will help yo improve the service that we provide to you.

Scheme The Local Government Pension Scheme will help you have a more financially secure retirement

If you leave it too late there may not be enough time to build up enough benefits to meet your needs at retirement.

A retirement pension is one of the last things you think about when you start working. As you get older, however, you inevitably acquire more responsibilities and begin to wonder how you will manage when you retire. It’s never too early to plan for a more financially secure retirement and people who join the Scheme are giving themselves the best possible head start. The Scheme is a very important part of your remuneration package, providing an additional benefit on top of your pay. It is a final salary scheme. This means that your benefits are based on your final year’s pay and the number of years you have been a member of the scheme, and not what you pay in. Like all other public sector schemes and the state pension it is fully index linked. Your contribution to the scheme depends on how much you are paid. The rates vary between 5.5% and 7.5% of your pay. Please note these pay ranges generally change every year and will be adjusted automatically by your employer. Band

Range 2010/2011

Contribution Rate

£0- £12,600

5.5%

£12.601-£14,700

5.8%

£14,701-£18,900

5.9%

£18,901-£31,500

6.5%

£31,501-£42,000

6.8%

£42,001-£78,000

7.2%

More than £78,700

7.5%

Overview If you work part-time, the rate you pay will be based on the whole time pay rate for your job, although you will only pay contributions on the pay you actually receive. The benefits you receive in retirement will often outstrip the contributions you make as your employer also makes contributions. Leaving the scheme If you leave the scheme for whatever reason, the options available to you depend on your total membership. If you leave with less than three months’ membership of the scheme, you would be entitled to a refund of your contributions, adjusted for tax and national insurance or a transfer to another pension scheme. When you have three months or more membership, the benefits you have built up will remain in the scheme until age 65 or can be transferred to another pension scheme if you wish. If you elect to leave your benefits in the scheme the benefits you have built up will increase in line with inflation each year up to and beyond retirement. If you return to work with an employer who has access to the scheme, you can rejoin the scheme and then make an election to join the two periods of scheme membership together. The scheme is nationwide and scheme membership can be transferred between Funds on a day for day basis.

The Scheme benefits include: 1. an index linked pension based on your final salary 2. the option to provide yourself with a tax free lump sum on retirement 3. option to increase your pension by a maximum of £5,000 per annum 4. the right to voluntary retirement from age 60 5. the option to take benefits earlier from age 55 with your employer’s consent 6. enhanced benefits for members who stay in the scheme past age 65 7. benefits payable at any age should you have to retire due to ill health 8. a death in service lump sum of three times your annual pay 9. survivor’s/spouses’ benefits 10. children’s pensions

What benefits will be payable if I die? If you die in service or within 10 years of retirement (at age 65 or before), the Local Government Pension Scheme ensures that your family is supported. It provides: • a lump sum death grant • an ongoing survivor’s pension for your husband, wife, civil partner or nominated cohabiting partner • children’s pensions if you have any eligible children Expression of Wish Form An Expression of Wish Form allows you to nominate one or more individuals or organisation to receive payment of the death grant. The Fund has discretion to pay the lump sum death grant to your nominee, personal representatives or to any person who appears, to have been your relative or dependant. In exercising this discretion the Fund will need to find out who are the legitimate potential beneficiaries and if you have made a nomination where your circumstances have changed, since it was completed. By making a nomination and keeping it up to date you will be ensuring your wishes are known and taken into account in deciding who the lump sum is paid to.

Earliest retirement age changes from 1 April 2010 You should be aware that with effect from 1 April 2010, the earliest retirement age other than for ill health cases will change from 50 to 55 for all Scheme members. This change has been applied to all pension schemes

Regulation Changes Payment of additional contributions: survivor benefits (ASBCs) for nominated cohabiting partners If you have registered that you have a cohabiting partner recent regulation changes mean that you now have the opportunity to pay additional contributions to count any period of membership occurring prior to the 6th April 1988. An election to pay for additional survivor benefits must be made in writing no later than 31st March 2011. We will be happy to provide you with further information and details of the costs involved on request. If you are currently cohabiting and have been for at least two years you may wish to nominate your partner to receive your survivors benefit. Please contact us for further details. Civil Partners Regulations have also been amended in respect of any active member who was in the scheme at 1 April 2008 and has a civil partner. This amendment will enable all periods of membership before 6 April 1988 to be taken into account for the purposes of a surviving civil partner’s entitlement.

Your pension in retirement Your Local Government Pension Scheme retirement benefits are made up of: • An annual pension paid monthly and (for members with membership before 1 April 2008) • An automatic tax-free lump sum paid on retirement. The two main factors used to calculate your retirement benefits are: • your membership* in the Scheme, and • your final pay** For each year of membership before 1st April 2008, your retirement pension will be based on 1/80th of your final pay – so if you had 40 years membership, up to 31 March 2008 you would get 40/80th’s or one half of your final year’s pay as an annual pension, plus an automatic lump sum of three times your pension. For each year of membership after 31st March 2008, your retirement pension will be based on 1/60th of your final pay - so if you have 30 years membership from 1 April 2008, you will get 30/60th’s or one half of your final year’s pay as an annual pension. Although there is no automatic lump sum, you can elect to give up part of your pension to have a tax-free lump sum if you wish. If you have both pre and post April 2008 service your benefits will be calculated using both of these methods. You will also have the option to convert some of your pension to lump sum at a rate of £1 of pension for £12 lump sum. (Please see below) Can I exchange part of my pension as a lump sum? You can exchange part of your annual pension for a one off tax-free cash lump sum. You can take up to 25% of the capital value of your pension benefit as a lump sum and you will receive £12 lump sum for each £1 of pension given up. Examples On retirement at age 65, a Scheme member has 20 years post April 2008 total membership and has a final pay of £15,000.

If the same employee had worked half time (i.e. 20 years at half-time = 10):

The annual pension is: 20 x 1/60 x £15,000 = £5,000

The annual pension would be: 10 years x 1/60 x £15,000 = £2,500

If you decide to give up £1,000 pension for a cash lump sum, then:

If you decide to give up £500 pension for a cash lump sum, then:

The reduced annual pension is: £5,000 less £1,000 = £4,000

The reduced annual pension is: £2,500 less £500 = £2,000

And you will get a tax free lump sum of: £1,000 x 12 = £12,000

And you will get a tax free lump sum of: £500 x 12 = £6,000

Annual Benefit Statement Each year you should receive an Annual Benefit Statement. This shows you the benefits you have purchased. It is important you check this statement to ensure the information we hold is correct.

13 *Membership This normally includes: • How many years and days you have been a member of the Scheme pro rota if you are part time. Membership purchased in the Scheme by a transfer from another Scheme or pension plan. • Any extra membership you have bought with additional contributions or by converting AVC’s into membership. This could be different to your actual calendar length membership of the Scheme. **Final Pay Final pay is usually the pay you paid pension contributions on during your final year of Scheme membership or one of the previous 2 years if higher. This normally includes: • normal pay • shift allowance • bonus • contractual overtime • any other taxable benefit specified in your contract as being pensionable. If you work part-time when you leave the Scheme, or have worked part-time in your last year of membership, your final pay is the whole-timers equivalent pay. If you have been in a continuous period of employment and find your pay is reduced or restricted, you may choose to have your pay calculated with reference to a more beneficial period as determined by the regulations currently in force.

Receiving your Pension

When can I retire?

Preparation for Retirement When do you want to retire? Have you thought about this yet? Consideration needs to be given to all the benefit options available to you.

Normal / Late Retirement - Age 65 is your normal retirement age in the scheme. You can stay in the scheme beyond this point but must draw your benefits by age 75 even if you continue to work

You may wish to consider the following things: • possible retirement dates timescales etc • Pensions and Financial Planning • Health in Retirement • Lifestyle Changes

Early Retirement - You can choose to retire and draw benefits from age 60, although they may be reduced for early payment. If you were a member of the LGPS on 30 September 2006, some or all of your benefits could be protected from any reduction for early payment under what is called the 85 year rule. The 85 year rule is satisfied if your age at the date you draw your benefits plus your scheme membership (each in whole years) add up to 85 or more. If you are part-time, your membership counts towards the rule of 85 at its full calendar length. Working out how you are affected by the 85 year rule can be quite complex, but this should help you work out your general position.

Please note that the rules on deciding whether you have protection under the 85 year rule, and the level of that protection, are quite complex. If you are thinking of voluntarily retiring early, you should contact the Pension Fund for a quotation of the benefits payable.

15 • If you would not satisfy the 85 year rule by the time you are 65, then all your benefits are reduced if you choose to retire before 65. The reduction will be based on how many years before 65 you draw your benefits. • If you will be age 60 or over by 31 March 2016 and choose to retire before age 65, then, provided you satisfy the 85 year rule when you start to draw your pension, the benefits you build up to 31 March 2016 will not be reduced. • If you will be aged 60 between 1 April 2016 and 31 March 2020 and meet the 85 year rule by 31 March 2020, some or all of the benefits you build up between 1 April 2008 and 31 March 2020 will not have a full reduction. • If you will be under age 60 by 31 March 2016 and choose to retire before age 65, then, provided you satisfy the 85 year rule when you start to draw your pension, the benefits you build up to 31 March 2008 will not be reduced. Redundancy or Efficiency Retirement - If you are made redundant or retire on business efficiency grounds and are at least age 55, immediate benefits are paid. Your benefits are payable immediately without reduction. Flexible Retirement - From age 55, if you reduce your hours or move to a less senior position, and provided your employer agrees, you can draw some or all of the pension benefits you have built up - helping you ease into retirement. Your employer will have a policy on flexible retirement. If your employer agrees to flexible retirement, you can continue to pay into the scheme building up further benefits.

Ill Health Retirement - If you have to leave work due to illness scheme benefits may be payable. To qualify for ill health benefits, your employer, based on the opinion of an authorised Independent Occupational Health Practitioner (IOHP), must be satisfied that you will be permanently unable to do your own job and that you have a reduced likelihood of being capable of obtaining gainful employment before age 65. Ill-health benefits can be paid at any age and are not reduced on account of early payment. In fact, your benefits could be increased to make up for your early retirement. 1. If you have no reasonable prospect of being capable of obtaining gainful employment before age 65, ill health benefits are based on the membership you would have had if you had stayed in the Scheme until age 65. 2. If you are unlikely to be capable of obtaining gainful employment within 3 years of leaving, but you may be capable of doing so before 65 then ill health benefits are based on your membership built up to leaving plus 25% of your prospective membership from leaving to age 65.

3. If you are likely to be capable of obtaining gainful employment within 3 years of leaving, ill health benefits are based on your membership at leaving. Payment of these benefits will be stopped after 3 years, or earlier if you are in gainful employment or become capable of undertaking such employment. Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.

16 The Retirement Process

We are notified of your retirement date by your employer

Provisional calculations of your benefits are provided with any options available to you including giving up pension for lump sum

Retirement forms to be completed and returned as soon as possible: • Decision on commutation • Bank details • Marital status • HMRC form • Recycling form

A final calculation of your benefits is provided along with the retirement forms

A retirement letter is sent confirming the lump sum payment has been paid into your bank account

First pension payment will follow at the end of the month

The pension will be payable monthly in arrears by means of a credit to your bank/ building society account. The amount due will be paid into your account on the 29th of each month or on the last normal banking day before the 29th if it falls on a weekend or bank holiday and a payment advice forwarded to your home address.

White water

Pensions Team making a splash for charity in a white water rafting challenge! Your pension team donned wet suits and took part in a white water rafting event in Bala, North Wales on the 18th July 2009. The event was held to raise sponsor money for The Anthony Nolan Trust, a Leukaemia Charity. Two teams of 7 made up of members from payroll and pension services participated along with 200 other fund raisers on the 2km world championship course, tackling the rapids, whirl pools and the infamous “graveyard” with the fastest team winning the coveted Anthony Nolan White Water Trophy! £2642 was raised for the charity through casual dress days, a 10 prize raffle and individual sponsorship donations. The day was a thoroughly enjoyable event with the pension team coming 4th of 14 in the competition! (Not bad we think for a team of pensions officers who don’t normally do extreme sports!) I hope you enjoy the pictures; it certainly was as wet as it looks! To find out about The Anthony Nolan Trust please visit

http://www.anthonynolan.org.uk Rebecca Purfit Help Desk Officer

Increasing Your Benefits

Most of us look forward to a happy and comfortable retirement. In order to have that little bit extra during your retirement years you may wish to consider paying extra contributions, which are a tax efficient way of topping up your income when you retire. There are a number of ways you can provide extra benefits, on top of the benefits you are already looking forward to as a member of the LGPS: • Additional Regular Contributions (ARCs) to buy extra LGPS pension • Additional Voluntary Contributions (AVCs) to the in-house AVC scheme • Free Standing Additional Voluntary Contributions (FSAVCs) to a scheme of your choice • Contributions into a stakeholder or personal pension plan You can combine any of these options. Additional Regular Contributions (ARCs) You can pay additional contributions to buy up to £5,000 of extra annual pension in blocks of £250. The cost to you of buying extra pension is calculated in accordance with

guidance issued by the Government Actuary. This can be reviewed at any time. This is payable on top of your normal LGPS benefits. You can buy extra pension for yourself and, if you wish, extra pension for your husband, wife, civil partner, nominated cohabiting partner or eligible children on your death. ARCs are deducted from your pay before tax, so you receive tax relief (at your highest rate) automatically through the payroll. The extra pension you buy will increase in line with the cost of living, both before and after you draw your pension. Your extra pension will be paid at the same time as your LGPS benefits. On retirement, you can exchange some of the extra pension you have bought for a cash lump sum in the same way as your main LGPS pension.

Did You Know?

Local Government Pension Scheme (LGPS) Additional Voluntary Contributions (AVC’s) If you pay tax at 20%, £100 of extra saving only costs you £80. If you pay tax at 40%, £100 of extra saving only costs you £60. AVCs are very flexible when it comes to deciding what you want, and now have appeal for employees of all ages, not just those close to retirement: • Your decision of how to take the money is made at retirement, not when you start saving. • You can start, stop or change how much you pay to suit your circumstances, subject to a maximum contribution of 50% per month. • You can receive the AVC Fund as 100% TAX-FREE CASH, subject to certain limits. • You can use the AVC Fund to buy a PENSION. • You can use the AVC Fund for a combination of TAX-FREE CASH and PENSION. • Any pension you buy in the LGPS is INDEX LINKED to fight inflation. • No medical is required. Pension will be taxed as earned income. There is no doubt that the Local Government Pension Scheme is an excellent scheme, but average benefits may not be as high as you might think. You should already have an idea of what your benefits are from the Annual Statement issued by the Pension Fund.

If you think your retirement benefits may not be enough, and would like more information about AVCs, you can either call the Pension Connection at Prudential on: 0845 607 0077 or email: Shropshire@prudential.co.uk with your daytime telephone number for a call back to discuss your options followed by a meeting if you wish. There is no cost for this service. It is an arrangement agreed between the prudential and the Pension Fund to improve awareness around retirement planning.*

*Calls to the Pension Connection are charged at local call rates and may be monitored or recorded for quality and security purposes. PRUDENTIAL IS THE AUTHORISED AVC PROVIDER FOR THE SHROPSHIRE PENSION FUND

Have you got a previous pension benefit held with a previous pension provider? Would you like to consider transferring those benefits into the Local Government Pension Scheme? If the answer to both those questions is yes you could ask us to investigate the transfer for you. There is a time limit on how long you have to transfer benefits. Everyone has the right to request a transfer into the Local Government Pension Scheme within 12 months of joining. Under exceptional circumstances you can ask your employer for an extension of the time limit. If you have got previous benefits elsewhere and you would like us to look into the transfer for you, please write in giving us the details (name and address) of the previous benefit provider. A basic guide to the steps involved in transferring benefits into the scheme are shown below.

Member

Member requests a transfer in quotation to be obtained from the previous pension provider .*

Member

Completes and returns authority form(s)

A formal request should be made in writing or by completing the relevant section of the application form

*This must be done within the first 12 months of Scheme Membership. Employers do however have discretion to increase this period of time

Pensions Service

Request Received Authority form sent to member

Authority form(s) received - Request transfer value from previous provider

23 Member

Pension Services

Calculate how much membership the transfer value will purchase in the Local Government Pension Scheme. Issue transfer value quotation to member.

Receives transfer quotation and returns decision along with any completed forms and relevant documentation

Pension Services

If member decides not to proceed, Pension Services will write to the previous pension provider with the decision If member decides to proceed, Pension Services will write to the previous provider to request payment of transfer value

Transferring Scheme

Calculate final transfer value and forward payment and details

Provide relevant transfer quotation and details

Pension Services

Transfer value payment received. Final calculations processed. Member sent notification of service purchased and completion of transfer

24 Investment Whilst Shropshire County Pension Fund investments performed poorly in 2008 due to the global recession and banking crisis they have rebounded strongly in 2009. Since March 2009 the Fund’s investments have recovered by over £200 million. The Fund is now valued at £900 million. It is important to remember that pension fund investment is a long term business and that the Fund is able to ride out stock market fluctuations. The last two years have been an example of how stock market falls can quickly be followed by stock market recovery. The Fund is able to take a long term view because it will be 30-40 years before some of the younger members of the scheme will be drawing their pensions. It is also important to remember that scheme benefits are unaffected by the value of investments and are based on your final salary. The Fund uses specialist investment managers to manage investments on its behalf. The Pension Committee makes changes to the Fund’s investment managers in response to investment under performance or new investment opportunities. In December 2009, MFS Ltd were appointed to manage a new global equity portfolio. This was funded by reducing the Fund’s allocation to UK equities. It is expected that this change will increase diversification and maintain the high standards expected from Shropshire’s investment managers.

Update

The Fund continues to take corporate governance seriously and actively votes at the Annual General Meetings of the companies in which it invests. For over ten years the Fund has been voting against excessive and unfair remuneration packages at UK banks. The Shropshire Fund is also a member of the Local Authority Pension Fund Forum. The Forum brings together 49 public sector pension funds to maximise their

influence as shareholders in promoting corporate social responsibility and high standards in corporate governance. Over the last year the Forum has been engaging with banks and the Government to push for governance improvements in the banking sector.

Shropshire County Pension Fund .co.uk We have been working furiously over the last few months to improve the fund’s website. This started with a change of name. The new website address is www.shropshirecountypensionfund.co.uk, exactly what you would expect it to be. The website has all the information you need about the fund and your benefits. You can also use it to access your own pension record on-line. To access your own details you will need to request a secure PIN number which can be done by clicking on the on-line calculator button on each page. There is information on many aspects of your membership of the scheme. Everything from joining the scheme up to retirement from it. There are several interactive elements of the website including an Additional Regular Contributions calculator and an on-line form for you to submit questions or comments. There are also a number of forms available for you to down load. These include change of address form, Expression of Wish form and even a scheme application form. Speaking of comments, if you think of something which you feel should be included on the website or you have any comments you would like to make please let us know. Please log on to: www.shropshirecountypensionfund.co.uk and have a look. Mark Betts Snr Help Desk Officer.

27 Please keep us informed! Please don’t forget to tell Pension Services if you: • Move house • Change your name • Get married • If your nomination details change • Get divorced or enter into a civil partnership How to contact us! You can contact us by calling our Help Desk on: 01743 252130 You can e-mail us at: pensions@shropshire.gov.uk or of course write to us at the address provided on the back of this magazine.

Frequently Asked Questions Can I opt out of the pension scheme and rejoin the scheme at a later date? If you’ve decided the scheme is not for you, you’re free to opt out from your next pay period. You might, however, want to take independent financial advice before opting out. You can re-join the scheme providing you have a contract of employment that’s for at least three months and you are under age 75. What happens if I change jobs/ employer but remain in the scheme? If, on or after changing jobs/employer, you re-join the scheme, you can transfer your existing scheme pension rights to your new period of membership, enabling you to enjoy benefits based on your entire period of membership and linked to your final pay on leaving again. If your new job is less well paid, you will need to decide whether it may be better not to join the benefits together. You only have 12 months from re-joining the scheme to opt to transfer previous scheme membership, unless your employer allows you longer. If you do not join the benefits together you will not normally be able to join the earlier benefits with any subsequent job you may take up in the future where you re-join the scheme in England and Wales. Pension rights built up as an employee in England or Wales cannot be joined with rights built up as a councillor or mayor in England or Wales and vice versa. Can I take out a personal or stakeholder pension at the same time as paying into the scheme? Yes - you can have a personal or stakeholder pension plan at the same time as paying into the scheme. You can, if you wish, pay up to 100% of your total taxable earnings in any one tax year (or £3600 if greater) into any number of

concurrent pension arrangements of your choice and be eligible for tax relief on those contributions. What happens if I have two or more jobs where I pay into the LGPS at the same time and leave one of them? You build up separate pension rights for each job. If you leave one of them before leaving the other(s), you will have the choice of joining your pension rights together. Details will be provided by us at the time. How do I know if my children are classed as eligible children? Eligible children are your children. They must, at the date of your death: • be under 18 and be wholly or mainly dependent on you, or • be aged 18 or over and under 23, be dependent on you, and be in full time education or undertaking vocational training, or • in some cases, a dependant child of any age who is disabled may be classed as an eligible child. • In all cases, the children must have been born before or within a year of your death. What happens if my job is transferred to a private contractor? The contractor will be required by your current employer to provide a pension scheme which is broadly equivalent to this Scheme. Although the new scheme may not mirror the benefits of the scheme, the value of the package it offers must be broadly equivalent. Alternatively, the contractor can seek admission body status in the scheme. This allows you to remain in the scheme so long as you are working in connection with the delivery of the contracted out service. How does part-time working affect my pension benefits? Your contribution rate is based on the whole time pay rate for your

job, although you will only pay contributions on the pay you actually earn. As a part-timer you will receive less pay than an equivalent full-timer and pay less into the scheme, so your benefits will build up at a proportionate rate to those of a full-time employee. Your final pay will be converted to full-time when calculating your benefits and your membership is adjusted to reflect your working hours. I am already buying extra scheme membership. Can I buy any extra benefits? If you are already buying extra years, you can still pay additional contributions to buy extra scheme pension (ARCs) and / or pay Additional Voluntary Contributions (AVCs), if you wish. Please see the section on Increasing your benefits. Can my employer award me any extra pension benefits? Your employer, at it’s discretion, can award you up to 10 years extra membership to improve your retirement benefits. They can also grant you up to £5,000 extra annual pension. Your employer can also pay into your in-house AVC scheme. This is known as a shared cost AVC arrangement. These are discretions your employer can use if they so wish; you can ask your employer what it’s policy is on this.

How will I be informed if the scheme rules change? Before any change can be made to any aspect of the scheme, the government will enter into a consultation process with employees’ representatives and employers. No changes can be made without them being passed through Parliament, and as your Scheme Administrator we will keep you informed of any developments by updating our scheme booklets and issuing regular newsletters. All scheme consultations and regulation changes can be found on our website: www.shropshirecountypensionfund.gov.uk If you wish to keep an eye out for any consultation documents you can also visit the following website: www.communities.gov.uk

Pensions Glossary Active/Current Member A member of an occupational pension scheme who is building pensionable service through their existing employment.

Deferred Member A member who leaves the scheme but whose benefits stay in the scheme and are not transferred anywhere else before payment.

Actuary An actuary is a professionally qualified independent person who the administering authority contracts with to value the fund and ensure that there is enough money to guarantee the payment of your pension and the pension of any eligible dependantâ&#x20AC;&#x2122;s you have.

Pensionable Service The period of time you pay into the Scheme, whilst working in a non teaching capacity within Local Government.

Administering Authority This is Shropshire Council. The Council is responsible for collecting contributions, investment of the fund and paying your pension. Beneficiary A person who will receive some form of benefit from the scheme once certain events come to pass e.g. a spouseâ&#x20AC;&#x2122;s pension payable on the death of an existing scheme member. Contributions A percentage of your salary which is paid into the pension fund in order to guarantee you a pension on retirement.

Retail Price Index This shows the changes in the cost of living. It reflects the movement of prices covering a range of goods and services over time. The amount by which pensions are increased annually each April is based on movement in the Retail Price Index during the 12 months to September.

Pension Services Shropshire Council Shirehall Abbey Foregate Shrewsbury SY2 6ND Administered by

Pensions helpline: (01743) 252130 Email: pensions@shropshire.gov.uk Web: www.shropshirecountypensionfund.co.uk