Assumed Pensionable Pay - ill health retirement or death in service
Assumed pensionable pay is used to work out any enhancement to your pension awarded as a result of ill health retirement, any lump sum death grant following death in service, and any enhancement which is included in survivor benefits following death in service.
The assumed pensionable pay for these purposes is calculated as the average of the pensionable pay you received for the 12 weeks (or 3 months if monthly paid) before you die or leave employment due to ill-health retirement. If your pensionable pay is reduced because you are away from work due to sickness or injury, or an authorised period of leave, or due a trade dispute, the reduction in your pay is ignored when calculating the assumed pensionable pay.
Also, if the pay you receive in the 12 weeks (or 3 months if monthly paid) before you die or leave employment due to ill-health retirement is lower than the pay you would normally receive, your employer has a discretion to use a higher pay in the calculation. Your employer must have regard to the pensionable pay you earned over the previous 12 months when determining what your normal level of pensionable pay is.
In addition, where an independent registered medical practitioner certifies that, during the period used to determine assumed pensionable pay, you were working reduced contractual hours because of the ill-health which led to your retirement or death in service, the assumed pensionable pay is to be calculated on the pay you would have received during that period had you not been working reduced contractual hours. The resulting figure is then grossed up to an annual figure.
Assumed pensionable pay is also used to ensure that your pension is not affected by any reduction to or suspension of your pensionable pay due to a period of sickness or injury. Refer to the section called away from work for more information about this.