Annual Benefit Statement (ABS)

This statement does not confer any rights to benefits, nor does it override your entitlement under the Local Government Pension Scheme Regulations 2013. You should not rely on this statement for retirement planning, entering into financial commitments, or making definite retirement decisions. If you plan to retire in the next 12 months, you must request an updated estimate from Southwark Pension Services. 

Please check the figures in your statement carefully, particularly your Pensionable Pay figures. You have the right to appeal if there is an error, in which case, please contact Southwark Pension Services for more information in the first instance (see contact details on the website).

Please note that if we do not have your marital/partnership status on record, we have assumed you are married and shown a spouse/partner’s pension in the statement accordingly. If the marital status shown is incorrect, please notify Southwark Pension Services of the correct status, sending evidence as appropriate (e.g. copy of marriage certificate).

If you have a co-habiting partner who may be entitled to a partner’s pension on your death, you can provide

more details by completing the Nominated Partner Application Form on our pensions webpage:

https://www.southwarkpensions.co.uk/pension-fund-members/membership-information/find-outmore/

member-documents/

Here we show the total value of your Scheme benefits at 31 March each year for two scenarios:

• If you choose to take the default-level tax-free lump sum and pension. (The default-level tax-free lump sum is zero if you joined the LGPS on or after 1 April 2008.)

• If you choose to take the maximum tax-free lump sum (subject to HMRC limits) and the reduced pension.

The figures do not include any early retirement reduction that may apply if you retire before your Normal Pension Age. The actual figures payable may be lower if you retire early.

If you are already over your Normal Pension Age, the figures below include any actuarial increases that apply.

If you transferred benefits into the LGPS during the year and you received confirmation that the transfer was completed before the beginning of August, the figures below will take the transfer into account.

The projected total value of your Scheme benefits for the same two scenarios at your Normal Pension Age is shown on the statement. The figures are estimates and assume:

• you remain an active member of the Scheme;

• you remain in the same Section of the Scheme that you were in on 31 March when the statement was produced; and

• any additional contribution contracts are paid in full.

Your tax-free lump sum

When you retire, you can take a tax-free lump sum of at least the default level (in line with the Scheme’s rules), up to a maximum allowed (in line with HMRC’s rules). If you choose a tax-free lump sum above the default level, you will give up (commute) some of your yearly pension.

Please note that if you exceed the lump sum allowance or lump sum death benefit allowance, your maximum tax-free lump sum may be lower than that quoted in this statement and the amount will depend on the level of allowances in force when you retire and any protections you may have. 

Sections of the CARE Scheme

The LGPS has two sections – the Main CARE Section and the 50/50 CARE Section. Most members are in the Main CARE Section, but it is possible to opt to go into the 50/50 CARE Section.

In the 50/50 CARE Section you pay half the contribution rate and build up CARE benefits at half the rate compared to the Main CARE Section.

You retain full death-in-service and ill-health cover.

If you have any 50/50 CARE Section membership up to 31 March 2025, this is shown on page 6. For more information about the 50/50 CARE Section, please contact Southwark Pension Services.

Additional contribution contracts

You can pay additional contributions to increase your LGPS benefits. There are two ways you can do this:

• pay Additional Voluntary Contributions (AVCs) to Southwark Pension Fund’s AVC provider AEGON; and/or

• pay Additional Pension Contributions (APCs) to buy extra LGPS pension. For more details, please contact Southwark Pension Services. (See the notes on pages 9, 10 and 11.)

If you die while an active member of the LGPS, it will pay a Lump Sum Death Grant and this will usually be paid to your nominated beneficiaries. You should confirm who you would like to receive this benefit by completing an Expression of Wish form.

If your nominations are out of date or your circumstances have changed, please consider updating them. You can update your nominations:

• via the Member Self Service portal on our pensions webpage within www.southwarkpensions.co.uk;

• by completing an Expression of Wish form which you can download at:

https://www.southwarkpensions.co.uk/pension-fund-members/membership-information/find-outmore/

member-documents/; or

• by requesting a blank Expression of Wish form from Southwark Pension Services.

1. Retirement age

The Scheme’s Normal Pension Age (NPA) for benefits built up from 1 April 2014 is the same as your State Pension Age (SPA), with a minimum NPA of 65.

Your NPA will change if the Government changes the State Pension Age. NPA is also shown in years and days. If, for example, your NPA shows as 65 years 203 days, you will reach your NPA when you are 65 years and 203 days old.

You can start to receive your benefits earlier or later than NPA – at any time between age 55 and 75 (or earlier than age 55 on the grounds of permanent ill-health).

If you start to draw your benefits before your NPA, they will be reduced for early payment (except if paid on ill-health or redundancy grounds). If you start to draw your benefits later than your NPA, they will be increased for late payment.

If you built up benefits before 1 April 2014, you will have an earlier NPA in respect of these. The Scheme’s NPA prior to 1 April 2014 was 65. Also, if you were a member of the Scheme before 1 October 2006 you may have the right to take some or all of your benefits unreduced before age 65 / your SPA.

Even if you have different NPAs for different parts of your benefits, you will still only retire once. The amount of reduction/increase applied to your benefits will be calculated separately for each part depending on the NPA for that part.

The benefits in this statement are quoted assuming that you will retire at your SPA (with a minimum age of 65 for members whose SPA is before 65). Southwark Pension Services can give you guidance on whether any of your benefits can be paid earlier than your SPA (or age 65) without reduction.

2. Calculating your benefits

The date shown on the statement for when you joined the LGPS includes all your previous LGPS service but does not include any non-LGPS service you have transferred in.

If you were a member of the LGPS before 1 April 2014, you will have Final Salary benefits.

• For membership up to 31 March 2008, you receive 1/80th of your Final Salary Pensionable Pay for each year of service as a pension, plus a lump sum (tax-free under current legislation) of 3/80ths of your Final Salary Pensionable Pay for each year of service.

• For membership between 1 April 2008 and 31 March 2014, you receive 1/60th of your Final Salary Pensionable Pay for each year of service as a pension.

For membership from 1 April 2014 you earn CARE pension at 31 March each year based on the pay you received in that year (1/49th of pay in the Main CARE Section and 1/98th of pay in the 50/50 CARE Section). Your benefits will be in the Main CARE Section unless you chose to join the 50/50 CARE Section for any period. You would have paid half rate contributions if you were in the 50/50 CARE Section.

For membership since 1 April 2008, there is no automatic lump sum payable, but on retirement you will have the option to give up some of your pension to obtain a lump sum (subject to HMRC limits) – every £1 of your annual pension given up provides £12 of lump sum.

The figures assume your pay will remain the same up to your NPA. Projected figures to NPA are shown in today’s money terms (i.e. they do not assume any future pay inflation or, for CARE benefits, any CARE revaluation).

3. Pensionable Pay for CARE benefits

Your CARE benefit built up during the year to 31 March is based on the amount of Pensionable Pay you received during the year to 31 March, plus any Assumed Pensionable Pay (APP) you received during the year for any periods where you had reduced or no pay due to sickness, injury or relevant child-related leave (apart from any period of child-related leave where the pay you received was higher than your APP).

Please check that you agree with the figure shown for your Pensionable Pay during the year to 31 March for your CARE benefits. This is provided by your employer. It is important that this figure is correct as your CARE benefits are calculated on your pay each year – this figure is not an estimate.

If you have been a member of both the Main CARE Section and 50/50 CARE Section of the Scheme during the 2024-25 year, you will have two CARE Pensionable Pay figures – one for your earnings during your time in the Main CARE Section and the other for your earnings during your time in the 50/50 CARE Section.

Revaluation for CARE benefits

The closing balance of your total CARE pension is revalued each year to protect its value against the effect of inflation. The revaluation adjustment is applied in April each year. The revaluation applied at 6 April 2025 is in line with the increase in the Consumer Prices Index to 30 September each year.

Note that the revaluation can go up or down each year.

Pay for Final Salary benefits

If you have Final Salary benefits in the Scheme, your employer has provided your Final Salary Pay which is the full-time equivalent (of 2008 Scheme definition of pay) in the year ending 31 March ignoring any reduction due to paid leave. This could be different from your Pensionable Pay during the year to 31 March used for your CARE benefits, as your Final Salary Pay is the full-time equivalent and does not include any non-contractual overtime you may work.

Your Final Salary Pay that is shown is an estimate.

Your final benefits on retirement will be calculated using your actual Final Salary Pay in the year up to the date of leaving or retiring from the Scheme.

Where you have had a drop in full-time equivalent pay within 10 years of leaving, you may be able to elect for an earlier year’s pay to be used. Please contact Southwark Pension Services for more information if this applies to you. If you want to use an earlier year’s pay this must be requested in writing at least one month before your leave date.

3. Your death benefits

The Lump Sum Death Grant is calculated as three times your Assumed Pensionable Pay.

If you have a separate deferred record or pension in payment in the LGPS (including in another Fund) and you pass away while still in your current employment, your beneficiaries will not receive a Death Grant from each record. The Death Grants from each record will be compared and the highest Death Grant will be paid to your beneficiaries.

This does not apply where you have more than one active pension record – a Death Grant will be paid in respect of each active record.

The spouse/partner’s pension quoted is based on the marital status we hold (see ‘Your details’ on page 3). If we do not hold this information we have assumed that you are married and the spouse/partner’s pension is quoted accordingly. If the marital status shown is wrong, please amend this on the Member Self-Service portal.

If you are in a co-habiting partnership, your survivor’s pension excludes pre-1988 membership.

A pension is only payable to a co-habiting partner if the following criteria are met:

• You and your partner must be co-habiting as if you were a married couple/civil partners.

• You must be free to marry (i.e. neither still married nor in a civil partnership with a third party).

• You must be financially interdependent, or your partner must be financially dependent on you.

• You must have met the above criteria for a continuous period of two years at the date a claim for payment is made.

Your partner will be asked to provide evidence if a claim for payment is made.

Survivor’s pensions are calculated by adding together your Final Salary survivor’s pension built up to 31 March 2014 (if any), any added years you may have bought that include a survivor’s pension, plus your survivor’s pension under the CARE arrangement (including a CARE enhancement based on Assumed Pensionable Pay x 1/160th x service from the date of death to your new NPA under the 2014 Scheme) and taking into account any deduction due to a pension sharing order.

Survivor’s pensions due under the CARE arrangement assume you remain an active member to NPA and are calculated on the assumption that your Pensionable Pay will remain constant to your new NPA. In addition, they do not assume any pay inflation or CARE revaluation for future benefit build-up in the CARE arrangement (i.e. the projection to your new NPA is shown in today’s money terms).

If you are single, no survivor’s pensions are payable (other than to eligible children). If you are in a cohabiting partnership, your partner may receive less than the pension shown for the reasons set out below.

If you have surviving children when you die, the LGPS will pay a pension to eligible children. 

If you marry or enter a civil partnership after you have left your employment, the pension payable to your spouse/civil partner could be lower than quoted in this statement. This is because the survivor’s pension will exclude pre-1978 membership (for the widow of a male Scheme member, a same-sex civil partner of a Scheme member, a female survivor of an opposite-sex civil partnership or the survivor of a same-sex marriage) or pre-1988 membership (for the widower of a female Scheme member or the male survivor of an opposite-sex civil partnership).

4. Your figures

Projections

All projected figures are based on your membership status at 31 March. If you have moved to the 50/50 CARE Section after that date, your projections are still based on membership of the Main CARE Section.

Additional benefits

If you are paying or have previously paid Additional Pension Contributions to buy extra LGPS pension, or you have previously entered a contract to buy ‘added years’, those benefits are included in the figures quoted in this statement (as long as the additional contributions contract is linked to the employment that this statement is in respect of).

Your projection assumes any additional contribution contracts will be fully completed.

 Transfers in

If this figure is shown it relates to extra pension bought using a transfer in that has been received for you during the Scheme year. The figures will take the transfer into account, as long as you received confirmation that it was completed before the beginning of August each year. If you have not yet received confirmation of a recent transfer, please contact Southwark Pension Services.

Actuarial increases

If you have Final Salary benefits relating to the period before 2014, the projected figures in your statement may include an actuarial increase for those benefits relating to the period between age 65 and your 2014 Scheme NPA. This is because Final Salary benefits have a NPA of 65 which may be below the 2014 Scheme NPA which is State Pension Age.

If you are already over your NPA, the current figures shown in this statement will also include the actuarial increase on both final salary and CARE benefits. If you are under NPA the current figures shown in this statement do not include the actuarial increase - only the projected figures do.

The increase applied is based on actuarial factors supplied by the Government Actuary’s Department. These factors were last reviewed in September 2023. If you are retiring soon, please ask Southwark Pension Services for an up-to-date estimate. 

The actuarial factors may be reviewed at any time in the future, which means the final, actual increase you receive may be lower or higher than the percentage used to work out the increase on this statement.

Pension deductions

Page 4 of your statement shows any pension debits (deductions) in place on your LGPS benefits where applicable, and these debits are taken into account in the figures shown. This is a change from how the figures have been shown on previous statements.

These debits could be from paying an Annual Allowance charge through ‘scheme pays’, or a pension sharing order following divorce.