Some terms we use
Additional Voluntary Contributions (AVCs)
These are extra payments to increase your future benefits. You can also pay
AVCs to provide additional life cover.
All local government pension funds have an AVC arrangement in which you can
invest money through an AVC provider, often an insurance company or building
society. AVCs are deducted directly from your pay and attract tax relief.
Admission Body
An admission body is an employer that chooses to participate in the scheme
under an admission agreement. These tend to be employers such as charities
and contractors.
Assumed Pensionable Pay
This provides a notional pensionable pay figure to ensure your pension is not
affected by any reduction in pensionable pay due to a period of sickness or
injury on reduced contractual pay or no pay, or relevant child related leave or
reserve forces service leave.
If you have a period of reduced contractual or no pay due to sickness or injury or you
have a period of relevant child related leave or reserve forces service leave then
your employer needs to provide the pension fund with the assumed pensionable
pay you would have received during that time. This requires a calculation to be
carried out by your employer to determine what your pay would have been for the
period when you were on reduced contractual pay or no pay due to sickness or the
period of relevant child related leave or reserve forces service leave.
The assumed pensionable pay is calculated as the average of the pensionable
pay you received for the 12 weeks (or 3 months if monthly paid) before the pay
period in which you went on to reduced pay or no pay because of sickness or
injury or you started a period of relevant child related leave or reserve forces
service leave. In calculating the average, any reduction due to authorised leave
of absence or due to a trade dispute is ignored. The resulting figure is then
grossed up to an annual figure and then divided by the period of time you were on
reduced pay or no pay for sickness or injury or on relevant child related leave or
reserve forces service leave.
32
SouthYorkshirePensionsAuthority
Assumed pensionable pay is also used to work out any enhancement to your
pension awarded as a result of ill health retirement, any lump sum death grant
following death in service, and any enhancement which is included in survivor
benefits following death in service. The assumed pensionable pay for these
purposes is calculated as the average of the pensionable pay you received for
the 12 weeks (or 3 months if monthly paid) before you died in service or before
you left employment due to ill-health retirement. In calculating the average, any
reduction due to authorised leave of absence or due to a trade dispute is ignored.
Also, where an independent registered medical practitioner certifies that, during
the period used to determine assumed pensionable pay, you were working
reduced contractual hours because of the ill-health which led to your retirement
or death in service, the assumed pensionable pay is to be calculated on the pay
you would have received during that period had you not been working reduced
contractual hours. The resulting figure is then grossed up to an annual figure.
Automatic enrolment date
This is the earlier of:
• the day you reach age 22 provided you are earning more than £10,000
(2016/17 figure) a year in the job, or
• the beginning of the pay period in which you first earn more than £10,000
(2016/17 figure) in the job, on an annualised basis, provided you are aged
22 or more and under State Pension Age at that time.
Civil Partnership (Civil Partner)
A Civil Partnership is a relationship between two people of the same sex (civil
partners) which is formed when they register as civil partners of each other.
Consumer Prices Index (CPI)
The Consumer Price Index (CPI) is the official measure of inflation of consumer
prices in the United Kingdom. This is currently the measure used to adjust your
pension account at the end of every scheme year when you are an active
member of the scheme and, after you have ceased to be an active member, it is
used to increase (each April) the value of your deferred pension in the scheme
and any pension in payment from the scheme. The adjustment ensures your
pension keeps up with the cost of living.
SouthYorkshirePensionsAuthority
33