Advice from the South Yorkshire Pension Scheme.

STRIKE ACTION AND THE LOCAL GOVERNMENT PENSION SCHEME

Due to the proposed industrial action many members are concerned about the effect that any absence may have upon their pension rights. In short, the number of years and days used to work out the benefits are reduced by any days of strike action which have not been paid for. Although any absence not paid for is recorded on our pension records as a break of service, it does not affect any pension rights built up before or after the absence.

However, there are further points that need to be made. . The eventual loss of benefits depends upon the number of days absent and the rate of pensionable pay in their year leading up to retirement. . If the absence falls in the last 12 months of membership, the pensionable pay used to calculate benefits for a member who leaves within 12 months of the end of the strike period could be very marginally higher/lower than it would otherwise have been.

For each day a member is on strike, this will extend by a day the date when a member attains 3 months membership, this being the period of membership necessary to be entitled to a benefit under the Scheme (this will be of no relevance to you if you already have more than 3 months membership).

In some cases, extended by one day the date when a member could retire before age 65 on an unreduced pension (i.e. add one day to the date on which a member’s combined age and membership in the Scheme, both in whole years, add up to 85 (known as the “85 year rule”).

AN EXAMPLE –HOW THE STRIKE AFFECTS MEMBERSHIP

If the member’s pensionable pay at retirement is £16,000 per year and at 65 the member would have built up 24 years membership with no loss of membership due to absence:

Pension = 24 years x 1/60 x £16,000 = £6,400 per year

The same member at age 65 with 2 days absence:

Pension = 23 years 363 days x 1/60 x £16,000 = £6,398.54 per year.

The member in this example would lose £1.46 per year from their pension for 2 days absence.

BUYING BACK THE ABSENCE

A member of the Scheme who is absent as a result of a trade dispute can elect to buy the period back at a rate of 16% of the pay lost. As an example of what this means: say the above . is on strike for two days . and would have earned £123.08 in two days . and elects to buy back the absence this member would see a deduction of £19.69 on their payslip in respect of the 16% contribution.

An election to buy back the membership must be made within 30 days of the last period of absence. If you wish to make an election please complete a Form 21. Please note that, regardless of whether or not you decide to pay the 16% contribution to count the strike period as a period of membership in the pension scheme, any additional contributions you may be paying to purchased added years of membership, to uprate any pre 1 April 1972 membership to provide a greater lump sum on retirement, or to purchase extra additional pension by way of Additional Regular Contributions (ARCs), will continue to be collected from your pay.

If you are paying Additional Voluntary Contributions (AVCs) to provide additional life cover we will assume that you would not wish the life cover to lapse and so continue to deducted these contributions from your pay.