How to calculate your retirement benefits
The Final Salary Arrangement – If yours Standard Pension Age is 60 years, your closing income benefits are a pension calculated by multiplying your service by your regular salary and then dividing by 80 plus a lump sum equivalent to three times your pension.
If your Standard Pension Age is 65 your closing salary benefits are a pension calculated by multiplying your service by your regular salary and then dividing by 60.
Your career average benefits are grounded on 1/57 of your pensionable earnings per annum plus index linking. This total is massed every year with your eventual pension which made up of all the amounts that have been banked each year.
Now, your average salary is used to calculate your final salary benefits after retirement. It’s calculated using as the better of the average of your best consecutive three years re-valued incomes in your last ten years of service or your last recorded 12 months of pensionable service before retirement.
If you’re in career average benefit category when you retire and have final income benefits, then the salaries you’ve received in career average will be used. If there is a break in service after 1 April 2015 of above five years, then the incomes used will be those at the time of the break. If you have no pensionable service on or after 1 January 2007, your average salary will be the best 365 days in the last 1095 days before retirement.
Conversion of Pension to Lump Sum
If your final salary service includes service before 1 January 2007, you will get a programmed lump sum when you take your final salary benefits. If you only have final salary service after that date, or have any career average service, you will not get any programmed lump sum when you take your benefits. Nevertheless, you can opt to give up part of your pension to get a lump sum. Your pension will be reduced for your lifetime and you must make your decision before finishing your application form.
What happens if one has a break in service?
Final Salary Members
If you were a final salary member with an NPA of 60 and had a break in service of above five years with a return date of on or after 1 January 2007, your NPA remains at 60 for the service before the break, but it is 65 for the service after the break. Any period of less than 60 days meet the requirements of service or 30 days reckonable service in any period of 365 days is not be totaled for the tenacities of maintaining a Normal Pension Age of 60.
If you are a protected or tapered member and have a break in service of more than five years after 1 April 2015, you will enter the career average planning when you return to pensionable service. If you retire and later re-enter pensionable service, you will enter the career average arrangement.
If you have reimbursements in both the final salary and career average provisions, your final salary reimbursements are sheltered and will appear in the final salary. When you retire we’ll use your salaries received in career average to calculate your final salary reimbursements. This is called the final salary link. If you have a break in pensionable service of more than five years ending after 1 April 2015, then the salary link is cracked and we will use the salaries at the time of the break to calculate your final salary benefits.
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