How we work out your credit account at retirement (age 65)
We are assuming that the memberÿs date of birth is 1 April 1951 and he will be retiring on 31 March 2016 when he is 65 years old.
Letÿs assume the memberÿs pensionable pay history is:
| Salary date | Pensionable pay |
|---|---|
| 01/04/2011 | £30,000 |
| 01/04/2012 | £32,000 |
| 01/04/2013 | £40,000 |
| 01/04/2014 | £42,250 |
| 01/04/2015 | £45,000 |
Let's assume consumer price inflation (CPI) during the period up to retirement is:
| Date | *CPI | Amount the credit account might be |
|---|---|---|
| 01/04/2012 | 3.0% | 1.03 |
| 01/04/2013 | 6.0% | 1.05 |
| 01/04/2014 | 2.0% | 1.02 |
| 01/04/2015 | 2.5% | 1.025 |
*CPI would be worked out for each year ending 30 September and capped at 5%.
Then the memberÿs credit account at retirement would be worked out like this:
| Scheme year | Plus section 30% x salary x CPI | Credit account at retirement |
|---|---|---|
| 01/04/2011 | £30,000 x 30% x 1.03 x 1.05 x 1.02 x 1.025 | £10,176 |
| 01/04/2012 | £32,000 x 30% x 1.05 x 1.02 x 1.025 | £10,538 |
| 01/04/2013 | £40,000 x 30% 1.02 x 1.025 | £12,546 |
| 01/04/2014 | £42,250 x 30% x1.025 | £12,991 |
| 01/04/2015 | £45,000 x 30% | £13,500 |
| Credit account payable at age 65 from the Plus section | £59,751 | |
| Scheme year | Standard section 20% x salary x CPI | Credit account at retirement |
|---|---|---|
| 01/04/2011 | £30,000 x 20% x 1.03 x 1.05 x 1.02 x 1.025 | £6,784 |
| 01/04/2012 | £32,000 x 20% x 1.05 x 1.02 x 1.025 | £7,026 |
| 01/04/2013 | £40,000 x 20% 1.02 x 1.025 | £8,364 |
| 01/04/2014 | £42,250 x 20% x1.025 | £8,661 |
| 01/04/2015 | £45,000 x 20% | £9,000 |
| Credit account payable at age 65 from the Standard section | £39,835 | |