Fact sheet - Average Salary
April 2008
What is average salary?
- This is the salary used in the calculation of your benefits at the date your pension becomes payable. It is based upon information provided by your employer.
What is the payable date?
- This is the date you become entitled to receive your pension benefits.
Is it always calculated in the same way?
- No, it depends on when your benefits become payable and when you left service.
- You can be assured that, of the calculations relevant to your circumstances, we will use the highest average salary value when we calculate your benefits.
What method is used if I left service before 1 January 2007?
- The highest amount of full salary for any consecutive 365 days of reckonable service, whether continuous or not, during the last three years of pensionable employment.
- Reckonable service is those years and days that count towards your pension benefits.
What method is used if I was in service before and after 1 January 2007 but benefits become payable on or before 31 December 2008?
The best of the following calculations will be used:
- The highest amount of full salary for any consecutive 365 days of reckonable service, whether continuous or not, during the last three years of pensionable employment;
- The salaries for the last ten years are increased at each salary change in line with the Retail Prices Index (RPI). Then the average of the best consecutive three years’ re-valued salaries in those ten years is used;
- The pensionable salary received in the last 12 months of employment before the date of retirement.
What method is used if benefits become payable after 31 December 2008?
The better of the following calculations will be used:
- The salaries for the last ten years are increased at each salary change to current day value in line with the RPI. The average of the best consecutive three years re-valued salaries in those ten years is used;
- The pensionable salary received in the last 12 months of employment before the date of retirement.