Pension Confusion? Let’s Clear It Up 

Pensions can sometimes seem confusing, especially when different schemes work in different ways. 
 
Today’s video explains the difference between defined contribution pensions and defined benefit pensions like the LGPS (NI). In a defined contribution pension, the amount you get at retirement depends on how much is paid in and how those savings perform through investments. The final value can go up or down. 
 
The LGPS (NI) works differently. It is a defined benefit pension, which means your pension is based on your pensionable pay and how long you have been a member of the Scheme, not on investment performance. 
 
Each year, if you are in the main section of the Scheme, 1/49th of your pensionable pay is added to your pension account. This amount is then revalued each year to help it keep up with the cost of living. 
 
Your employer also pays into the Scheme, but employer contribution rates do not decide how much pension you receive. These rates are set following regular valuations of the Fund to make sure there is enough money to pay members’ pensions. 
 
Watch today’s video to clear up some of the most common misunderstandings and learn more about how your LGPS (NI) pension builds up.