Final Salary Pay
Final salary pay
To calculate a member’s benefits we need to know their pensionable pay for both their career average revalued earnings (CARE) and their final salary pay.
- Full time members: Usually the total amount paid, and on which contributions were paid or were deemed to be paid, in the last 365 days of employment.
- Part time members: Usually the actual pay and the full time equivalent pay for the last 365 days of employment.
You only need to provide a final salary pay figure for members who joined before 1 April 2014. If a member does not have pre 1 April 2014 membership with you, we may need to ask for a final salary pay figure if the member has previous service with another employer.
You should calculate final salary pay using the definition in regulation 4 of the 2008 regulations.
Where there is a gap in membership in the final year, for example due to unpaid leave where contributions were not paid, the pay should be grossed up to a full year. Where an absence was due to illness or injury, you should work out final salary pay as if the reduction or loss had not occurred.
The final salary pay queries document lets you know when we will query a final salary pay figures with you. It does not cover career average revalued earnings (CARE) pay or assumed pensionable pay queries.
- Best of the last three years
- Regulation 10
- Underpin protection
- Breaks in service
If the final salary pay in either of the two years immediately before the final year would provide a higher figure, you should use that higher figure. This is known as using the ‘best of the last three years’. When applying this you should use an anniversary of the date the member left.
Example
For someone leaving on 13 August 2014, you should calculate the final salary pay for all of the following and use the highest value:
- year to 13 August 2014;
- year to 13 August 2013; and
- year to 13 August 2012
From 1 April 2008, any member who has a pay cut or restriction in respect of prescribed circumstances has the right to request that (for final salary pay purposes) the best average of any three consecutive years in the last 13 years of membership is used.
For simplicity, these 13 years all end on 31 March rather than anniversaries of the date of leaving. This right continues to apply even where the pay cut or restriction occurs after 31 March 2014. This can be calculated by using our calculator below.
Please find below some basic guidance which may assist you when completing the spreadsheet:
- Please note the up and down arrow keys will either increase or decrease the amount entered in the ‘full time equivalent pay’ field.
- Please use the tab key to move around the spreadsheet.
The reg 10 calculator does not compare the figures against the best of the last three years calculation, which should be done in all cases. You should compare the final figure provided in the calculator against your manual best of the last three year calculation. The reg 10 calculator final figure will have pensions increase (PI) included and the best of the last three years will not. You should compare these figures as they are calculated and submit the most beneficial final pay figure, eg reg 10 figure (with PI) >< best of last three years (without PI).
Please note that this calculator will not show for leavers on the 31/03/2026. For this please use the Spreadsheet found below.
| Full time equivalent pay |
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If this applies to a member then you must invoke regulation 10 before they leave employment. There is no legal obligation to apply regulation 10 automatically but from a good practice point of view you should consider pay reductions when assessing final pay. Your policy regarding your approach to applying regulation 10 should be clear and available to employees.
If you prefer, there is also a spreadsheet version of the 2026-27 regulation 10 calculator.
For employees who left before 31 March 2026, this spreadsheet version is available.
Some members may have underpin protection which provides a pension at least equal to that which they would have received from the LGPS had it not changed on 1 April 2014. The member must have been an active member of the 2008 Scheme on 31 March 2012 and be ten years or less from their normal retirement age under the 2008 Scheme on 1 April 2012. If the member fits these criteria, please tell us about any change in hours or breaks in service in the optional remarks box on the P48 form.
A break in service includes strike breaks, unpaid authorised leave of absence or unpaid additional child related leave/unpaid shared parental leave.
Breaks after 1 April 2014
You only need to notify us of a break in service that occurred on or after 1 April 2014 if the member:
- doesn't take out an additional pension contribution (APC) contract to purchase lost pension
- has underpin protection
- has the 85 year rule protection.
You should always notify us of unpaid unauthorised leave of absence. This is because this will always constitute a break in service as there is no facility to buy back the lost pension.
Breaks before 1 April 2014
You should complete the change in member details spreadsheet (P5s) to provide details of service breaks. If the change occurred on or after 1 April 2014, only notify us where there is membership before 1 April 2014 or the member has concurrent employments.
All other changes to the member’s pension record should be sent to us as part of your i-Connect submission.
Alternatively, instead of using the P5 spreadsheet, you can tell us in the comments column (Column K) of the Leaver notification spreadsheet. If you are using the spreadsheet to notify us of a break in service or a change in circumstances that you have not already told us about, your comments in the optional remarks box should follow the format in which you would provide information on the P5s.