Pension - Local Government employees
As a new employee, if you're under age 75, you'll join the Local Government Pension Scheme (LGPS). The scheme is a nationwide, regulated, statutory-funded scheme for Local Government employees. The Scheme is administered locally by Lothian Pension Fund (LPF).
Automatic enrolment
As an employer, we must automatically enrol certain members of our workforce into the Local Government Pension Scheme (LGPS) and we'll let you know if and when you're to be automatically enrolled. The aim of automatic enrolment is to encourage more people to save for a longer retirement and to help more people have another income, on top of the State Pension, when they retire.
Pension contributions and membership
As a member of a pension scheme, you'll benefit because we contribute to your pension, and so will the Government in the form of tax relief. It's an easy way to save for your retirement.
Your pensionable pay is 'what you pay contributions on' and includes your normal salary plus contractual bonuses and shift allowances - it does not include non-contractual overtime.
Contributions are calculated on a tiered basis, which means that your contributions are based on what you earn.
For part-time employees, their contribution rate is first worked out for the full-time equivalent pay rate for the job. This rate is then applied to their actual pay. This means that everyone doing the same job has the same contribution rate but that they only pay contributions on what they actually earn.
How your pension is worked out
The pension is a career average salary scheme, this is where your pension is worked out each scheme year and inflation increases are added - so your pension keeps up with the cost of living. In the career average scheme your pension will build up at a rate of 1/49th of the amount of pensionable pay you received in that scheme year.
For example, a member who receives £10,000 pensionable pay in a scheme year would build up £204.08 in pension for that year (so £10,000 x 1/49th).
The amount of pension you build up is added to your pension account at the end of each scheme year and inflation increases are added. If you have more than one job, the benefits built up under each job will be kept separate. As such you'll have more than one pension account.
Example showing the pension building up over three years with salary increases and inflation added
In this example, if the employee retired after three years at their Normal Pension Age, their annual pension would be £673.95.
Year 1
- Their pay is £10,000
- Their pension for 2025/26 = £204.08
- Then we add inflation at 1% = £2.04
- Means a pension of £206.12
Year 2
- Their pay is £10,500
- Plus a pension carried forward of £206.12
- Plus a pension for 2026/27 of £214.29
- Plus inflation at 3% = £12.61
- Means a pension of £433.02
Year 3
- Their pay is £11,000
- They carried forward a pension of £433.02
- Plus a pension for 2027/28 of £224.49
- Plus inflation at 2.5% = £16.44
- Means a pension of £673.95
Supporting information
For an employee’s guide to the Local Government Pension Scheme (LGPS), visit the Lothian Pension Fund website.
For more general information about pensions and saving for retirement visit the Workplace pensions: About workplace pensions gov.uk website.
Lothian Pension Fund contact details
Telephone: 0131 529 4638
Email: pensions@lpf.org.uk
Website: LothianPensionFund
Postal address: Lothian Pension Fund, Atria One, 144 Morrison Street, Edinburgh, EH3 8EX.