Calculating APP

The Assumed Pensionable Pay (APP) is the pensionable pay an active member is treated as receiving and/or received during the circumstances listed below. The aim of APP is to re-create in so far as possible what a member would have earned if the applicable circumstance had not occurred.

Assumed Pensionable Pay will be needed for:

  • Periods of Nil or Half Pay due to Sickness / Injury
  • Reduced pay for child related leave
  • Tier 1 and Tier 2 Ill Health Retirements
  • Death in Service
  • Divorce Calculations
  • Reserve Forces Service Leave
Calculation of APP
  • Calculated as an annual rate then applied to the relevant period
  • Relevant date is date on which member’s contractual pay reduces
  • Weekly paid – average pay in last 12 weeks
  • Monthly paid – three complete pay periods
  • Periods above prior to relevant event (remove lump sum payments*) include any relevant APP. Gross up to annual rate. Divide as appropriate to get the APP you need
  • Employer able to use discretion
  • Will include extra hours worked and overtime
  • Lump sums (as a general rule) to be ignored
  • However, employers can, at their sole discretion, add in any regular lump sum payment made in the last 12 months (‘reasonable expectation’)

Please follow the links below to the LGPS Regs site, which contains handy bitesize training on the various implementations of APP

What is APP and when does it apply?

How to calculate APP and example calculations

How to calculate employee and employer contributions when APP applies

How APP interacts with the 50/50 section of the LGPS

How APP interacts with KIT, Split and Stringer days

APP for ill health and death benefits and how to calculate it

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