Cumulative Pensionable Pay (CPP) and Assumed Pensionable Pay (APP)

From 1 April 2014, pension built up in the LGPS is based on cumulative pensionable pay. 

You must keep separate pay records for:

  • The main section of the LGPS.
  • The 50/50 section of the LGPS.

Each year, a member builds up:

  • 1/49th of their cumulative pensionable pay if they are in the main section. 
  • 1/98th during any period they are in the 50/50 section.

Cumulative pensionable pay is made up of:

  • Actual pensionable pay 
  • Assumed pensionable pay (APP).
  • Lost pensionable pay (LPP).
Actual pensionable pay

Actual pensionable pay is the pay the member receives when they are working normally. It does not include pay that has been reduced or stopped because of an absence where APP applies, such as sickness or authorised unpaid leave. 

Assumed Pensionable Pay (APP)

APP is a notional pay figure. It represents what the member would have earned if they had been working normally and their pay had been reduced or stopped.

You use APP to make sure pension benefits continue to build up fairly during certain absences. 

You must use APP when:

  • A member's pay is reduced or stopped because of sickness or injury.
  • A member is on child-related leave such as maternity, paternity, adoption or shared parental leave. 
  • A member has purchased a Shared Cost APC for lost pension due to an absence which started started before 1 April 2026.
  • A member takes ill health retirement and an enhancement may apply.
  • A member dies in service and survivor benefits need to be calculated. 
  • A member is on reserve forces service leave provided the member elects to remain the LGPS instead of joining the Armed Forces Pension Scheme.

How to calculate APP

To calculate APP, work out an annual rate of pay using the 12 week or 3 month period before the event that caused the reduction or stop in pay. 

Action Employee paid monthly Other employees
Calculate APP using 3 months before the month in which the event occurred 12 weeks before the pay period the event occurred
Example If a member died on 15 June, use March, April and May If a weekly paid member retired in week 37, use weeks 24 to 36 
Work out annual APP
 (Pay + pay + pay) / 3 × 12 + recurring payments
 Total 12 weeks' pay / 12 × 52 + recurring payments
Apply APP to an absence Annual APP / 12 × length of absence
 Annual APP / 52 × length of absence

You must:

  • Remove any non-regular lump sums
  • Add back any regular payments from the previous twelve months that would have continued.

If the calculated APP is lower than the pay the member would normally receive when working, you can use the higher figure instead, as long as you have a published discretions policy which allows this.

Lost pensionable pay (LPP)

Lost pensionable pay is the pay that the member would have received if they had been at work receiving their normal pay during the period of absence. 

Normal Pay:

  • Excludes any payment in respect of overtime and bonuses that the member would have received, but did not actually receive, in addition to their contractual pay, and 
  • Includes any pensionable pay that the member actually received in, or in respect of, the period of absence. 

You must use LPP for:

  • Authorised unpaid leave of 14 days or less, starting on or after 1 April 2026
  • Authorised unpaid leave of more than 14 days, starting on or after 1 April 2026, where the member elects to purchase 'lost pension' through a qualifying additional pension arrangement (QAPA).

You must: 

  • Deduct and pay over employee contributions and employer contributions based on LPP during a period of authorised absence of 14 days or less starting on or after 1 April 2026.
  • Include LPP in reported pensionable pay figures, for periods of authorised absence of 14 days or less starting on or after 1 April 2026.
  • Use the LPP figure to notify a member of the option to elect to purchase a QAPA where authorised unpaid leave is more than 14 days, starting after 1 April 2026.
Tools and Training

You can use the following resources to help you calculate and report pensionable pay correctly: