To make sure your submissions are correct, we're sharing a reminder on how different types of holiday pay should be treated for LGPS pensionable pay.
Under the LGPS definition of pensionable pay, how holiday pay is treated depends on why it is being paid:
Pensionable:
If a member is still employed and payroll process holiday pay as holiday hours through normal pay, it remains part of their pensionable pay.
Non‑pensionable:
If a member has left employment and is paid outstanding holiday/annual leave as a lump sum on leaving, this payment is non‑pensionable. This aligns with the regulatory exclusion for “any payment in consideration of loss of holidays.”
Pensionable pay is defined slightly different under the 2008 and 2014 LGPS regulations, but in both versions a payment made in consideration of lost or outstanding holidays is non-pensionable.
You can find the full definition of pensionable pay on our website
If you are unsure how a specific scenario should be treated, please get in touch with us for more guidance.
