If you joined the Local Government Pension Scheme (LGPS) on or before 31 March 2014 and 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 (that is, your final salary), so changing your hours will not effect the pre April 2014 part of your pension benefits.

Since 1 April 2014, however, 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 1/49th (accrual rate) and revalued by cost of living adjustments to provide an updated pension value at the new pension year on 1 April.

Below is an example of what happens to CARE pension benefits when a member changes their working hours from 30 hours per week in scheme year 1, to 15 hours per week in scheme year 2.

Example

Scheme year 1

Elizabeth was new to the scheme, starting on 1 April 2017 and worked 30 hours per week (her opening balance therefore 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 decrease 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