Pensionable pay
What to deduct contributions from
This summarises the kinds of pay that you should deduct pension contributions from. Please refer to the LGPS regulations for a complete list.
https://www.lgpsmember.org/more/penpay.php
- Pensionable pay from April 2014
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- Salary, wages
- Fee
- Overtime – contractual and non contractual
- Any benefits in employee's contract as pensionable
- Not pensionable
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- Not assessed for income tax
- Travel, subsistence, other expenses
- Pay in lieu of leave
- Pay in lieu of notice
- Pay in consideration of loss of future pensionable pay benefits
- Inducement not to leave
- Inducement to terminate contract
- Car allowance
- Employees' contributions
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Employees' contributions are a percentage of their pensionable pay – the percentage is determined by their actual pensionable pay, or their assumed pensionable pay (APP) in respect of some types of absences.
- You must determine the rate that employees will pay when they join the LGPS – you need a consistent and fair way to do this as you may not know what each employee will earn.
- You must review the contribution band that your employees are in each April.
- You can review your employees' contribution bands more often if you wish.