Contributions

Please see table below for the Local Government Pension Scheme (LGPS) contribution bandings which were applied from 1st April 2017. Please ensure that your employees are placed in the appropriate banding according to their ACTUAL pensionable pay, including contractual and non-contractual overtime and bonuses, not their full time equivalent (FTE).

Band

Actual Pensionable Pay Range

Employee Contribution
rate % (Main Scheme)

1

Up to £13,700

5.50

2

£13,701 to £21,400

5.80

3

£21,401 to £34,700

6.50

4

£34,701 to £43,900

6.80

5

£43,901 to £61,300

8.50

6

£61,301 to £86,800

9.90

7

£86,801 to £102,200

10.50

8

£102,201 to £153,300

11.40

9

£153,301 or more

12.50


You should also confirm that your payroll provider is made aware that the bandings changed from Aril 2017 and ensure that they apply these bandings to pension contributions for the April pay for employees in the LGPS. As in the previous year, contribution rates are based on actual pay, which includes non-contractual overtime and bonuses, and employers need to decide the appropriate bands for their staff. You are required to reassess each member’s band and you can re-assess where there is a material change in their pay in the year which may move them into a different pay band, either higher or lower.

Therefore you can use fixed or variable bandings -

• Fixed banding – need to make an assessment of the member’s likely actual pay at the start of the year
• Variable banding – banding fluctuates throughout the year with actual pay.

If you choose to use the variable banding, you will need to liaise with your payroll provider to arrange an automated process where possible. You must also inform your employees in writing at the start of the year, which method you will be using to assess their contribution bands and inform them of their right to appeal, and how to appeal, against their banding. As an employer in the Fund, the method you have chosen, should be formally adopted and be included in your discretion policies.

You will also be aware that members of the LGPS can opt into the 50/50 section of the scheme (providing they are already in the main section of scheme), whereby they are able to pay half the main scheme contribution rate. You will need to ensure the appropriate contribution rate is applied to those members actual pensionable pay from the next pay period following their election to opt to 50/50.

Please ensure that your payroll provider is able to apply the following contribution rates in respect to those members who opt into the 50/50 section of the scheme:

Band

Actual Pensionable Pay Range

Employee Contribution rate (Main Scheme)

Employee Contribution rate %(50/50 Scheme)

1

Up to £13,700

5.50

2.75

2

£13,701 to £21,400

5.80

2.90

3

£21,401 to £34,700

6.50

3.25

4

£34,701 to £43,900

6.80

3.40

5

£43,901 to £61,300

8.50

4.25

6

£61,301 to £86,800

9.90

4.85

7

£86,801 to £102,200

10.50

5.25

8

£102,201 to £153,300

11.40

5.70

9

£153,301 or more

12.50

6.25



If you have any queries concerning the contents of this letter, please do not hesitate to contact us on 0207 364 4251.

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