Every April employee contribution pay bands are reviewed in line with cost of living to take account of inflationary increases. The bands are adjusted in line with the Consumer Price Index (CPI) rate of inflation at September of the previous year. The table below sets out the contribution bands effective from 1 April 2024. These are based on the pay bands for the previous year increased by the September 2023 CPI figure of 6.7%, with the result rounded down to the nearest £100.



Employers will have to reassess contribution rates for each scheme member based on their pensionable pay at 1 April 2024.

Any reductions in pensionable pay due to sickness, child related leave, reserved forces service leave or other absence from work will be disregarded when assessing/reviewing the appropriate band/contribution rate.

Members on ‘zero hours’ contracts or variable hour’s contracts, etc. will require an assumption to be made of the pensionable pay for the Scheme year.

Part-Time Employees

For part time members, the contribution rate assessment is to be made by reference to actual pay.

Multiple Employments

If you have more than one employment you will have each job assessed separately when determining the contribution rate for each job.

Movements between Contribution Bands

Once the initial pay band and contribution rate has been determined, employers are required by the regulations to reassess the appropriate band and rate each April, and are permitted by the regulations to review the appropriate band and rate where there is a change in a member’s employment, or a material change which affects pensionable pay in the course of a financial year.

FAQs for LGPS members: Backdated pay awards

These FAQs cover the common questions that arise when you receive a backdated pay award. A backdated pay award occurs when a pay increase is agreed after the date the new rate of pay should have been paid from.

Are pension contributions deducted on pay arrears due to a backdated pay award?

Yes – employee pension contributions must be deducted from arrears of pensionable pay that is paid because of a backdated pay award.

If I leave employment before the award is agreed, do I receive the pay award?

Employers are not obliged to contact former employees to offer the pay award. However, if you request it, the pay award should be applied, and arrears paid.

If I leave employment before the award is agreed, are pension contributions deducted from the arrears?

Yes - employee pension contributions must be deducted from arrears of pensionable pay that is paid because of a backdated pay award.

Where pensionable pay is paid after you left employment or opted out of the Scheme and your employer has already submitted leaving data to SYPA, they must send:

• revised data - if the payment is made in the year of leaving,

or

• new data - if the payment is made in a year after leaving

Should our employer review employee contribution rates when they implement the pay award?

This is at their discretion. They must review employee contribution bands and rates each April, in the pay period in which 1 April falls. So employee contribution rates would have been reviewed on the previous 1 April on earnings without the pay increase.

They may choose to review employee contribution bands and rates where a material change in pay occurs. Pay increases due to a pay award are a material change.

Ultimately, other than each April, it is their discretion when to review employee contribution rates and when to apply any change. Regardless, pension contributions must be deducted from the arrears of pensionable pay.

If the employer changes an employee’s contribution band, they must inform the employee of the new contribution rate and the date the change is applied from.

If the employer reviews employee contribution rates following the agreement of a pay award, when is the new contribution rate effective from?

The employer can choose to apply the new contribution rate from the:

• effective date of the pay award – this means the new contribution rate will be applied retrospectively to the pensionable pay paid from the effective date of the pay award including the pay arrears,

or

• date the pay award is actioned on the payroll.

In both scenarios they must inform employees of the new contribution rate and the date the change will be applied from.

If it is the employer’s policy to automate the process of reviewing contribution rates each month then members may pay a higher contribution rate in the pay period that they receive the pay arrears.

How does a backdated pay award affect CARE pay?

A backdated pay award will buy earned pension in your pension account in the scheme year it is paid. For example, if a pay award relating to 1 April 2021 to 31 March 2022 is paid in April 2022, earned pension is credited to your CARE account in the scheme year beginning on 1 April 2022.

How does a backdated pay award affect final salary pay?

A backdated pay award must be included in any final pay calculations for members with final salary benefits. It must be attributed to the period it was earned. For example, if a pay award relating to 1 April 2021 to 31 March 2022 is paid in April 2022 and a final pay calculation is required, the arrears of pay must be allocated to the period in which they were earned when calculating final pay.

Final pay is usually the pensionable pay for the final 365 days of employment. Pay from one of the previous two years must be used if higher.

Should pension contributions be deducted on pay arrears if I opted out?

It depends:

No - if you opted out within three months of joining the LGPS and a refund of contributions was processed

Yes – if you opted out after three months of joining the LGPS and the pay arrears relate, in part or whole, to a period you were a member of the LGPS. Contributions are deducted on the pay arrears that relate