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Document What is Protection of Pay?

If you have at least two years qualifying membership and suffer a reduction in pensionable pay through no fault of your own, you can apply to protect your pension benefits if you are a protected member of the 1995/2008 Scheme or a 2015 Scheme member with a salary link to 1995/2008 scheme benefits. You must apply for protection of pay within three months from the date at which your pensionable pay reduces.

Protection of pay does not apply to actual 2015 scheme membership.

Examples of circumstances that would support an application for Protection of Pay are:

  • a change in the nature of the duties performed, for example, due to ill health
  • a move to a lower paid post because of pending or actual redundancy
  • being transferred to other employment due to reorganisation

There is no age restriction or minimum level of pay reduction requirement and there is no limit to the number of requests you can make if your pay reduces on more than one occasion.

You do not need to apply to protect pay if:

  • You are only reducing your hours and not your hourly rate of pay. This is because we always use the whole time equivalent pay when calculating retirement benefits for the 1995/2008 Scheme.
  • You are a Practitioner. Protection of Pay is not relevant for 1995/2008 Scheme Practitioner employment as pension benefits are based on their earnings throughout their career and revalued. This is known as a Career Average Revalued Earnings (CARE) pension which has similarities to the 2015 Scheme.

How your pension is calculated if an application to protect pay is accepted:

If you have one period of protection when you retire, two pensions will be calculated. A pension based on your protected rate of pay* plus cost of living increases for membership up to the date of protection, and a second pension for membership after that date which will be calculated on your pay* at retirement.

If by retirement, the protected pay plus cost of living increases is not more beneficial to you, then the whole of your 1995/2008 Scheme pension benefits will be calculated using your pay* at retirement.

*1995 Section membership - The best of the last three years of pensionable pay.

*2008 Section membership - The reckonable pay, which is an average of the best three consecutive years pensionable pay in the last 10 years.

For further information regarding Protection of Pay and to download the SM R9 application form, please refer to the protection of pay and voluntary protection of pay factsheet on our website.

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