Pensionable pay is the amount of pay on which you pay contributions. From 1 April 2014 it includes non-contractual (as well as contractual) overtime and any additional hours worked in excess of your contractual hours.
Pension Accounts
Under the CARE Scheme you have a Pension Account for each pensionable employment you hold. So, for example, if you hold two separate pensionable part-time employments you will have two Pension Accounts.
Your Pension Account for each employment will hold the annual pension you have built up each year.
Scheme Year
The scheme year under runs from 1 April to 31 March.
Rate of pension build up
Each year, you will build up a pension at a rate of 1/49th of the amount of pensionable pay you received in that scheme year (or, if you had been on reduced pay due to sickness or relevant child related leave, the pay you would have received). The amount of pension you build up is added to your Pension Account at the end of each scheme year.
For any period you were in the 50/50 section the pension you build up is based on a 1/98th of your pensionable pay.
You can add extra amounts into your Pension Account - for example, if you decide to pay extra contributions to buy additional pension, or you transfer in a pension from another pension arrangement, the amount of extra pension credited will be added to your Account.
In certain circumstances, amounts can be deducted from your Pension Account - for example, if a Court orders that part of your pension should be transferred to an ex-spouse or civil partner following divorce or dissolution of a civil partnership.
Cost of living adjustment
The amount of pension in your Pension Account at the end of each scheme year is adjusted in line with the cost of living - as currently measured by the Consumer Prices Index (CPI) - to ensure it keeps its value. The next revaluation will take place on 6 April 2023 and the percentage increase will be 10.1%.
How a pension will be worked out - an example
Susan is in the MAIN section of the scheme from 1 April 2022 to 31 March 2023 and earned £24,500 in that year.
|
Scheme year |
2022/2023 |
| Section of scheme |
MAIN Section |
| Rate of build up |
1/49th of pensionable pay |
| Pensionable pay | £24,500 |
| Amount of pension built up | £500 (i.e. £24,500 divided by 49) |
At the end of the scheme year, £500 is added to Susan's Pension Account. To make sure the amount keeps it value, the total in the Pension Account will be adjusted in line with the cost of living. As the current inflation rate is 10.1%, the £500 in Susan's account at the end of the scheme year (31 March 2023) would be increased on 6 April 2023 to £550.50
Susan remains in the MAIN section of the scheme during the next scheme year (1 April 2023 to 31 March 2024) and earns £25,333 in that year.
| Scheme year | 2023/2024 |
| Section of scheme | MAIN Section |
| Rate of build up | 1/49th of pensionable pay |
| Pensionable pay | £25,333 |
| Amount of pension built up | £517 (i.e. £25,333 divided by 49) |
| Amount of pension brought forward | £550.50 |
| Total pension in Account | £1,067.50 |
So, at the end of the second scheme year, Susan has £1,067.50 in her Account. As before, to make sure the amount keeps it value, the total in the Pension Account will be adjusted in line with the cost of living. If inflation was, say, 3%, the £1,067.50 in the account at 31 March 2024 would be increased on 6 April 2024 to £1,099.52.
If Susan had been in the 50/50 section during those two scheme years the amount in her Pension Account would be half the amounts shown above.