If you retire before state retirement age and your pension is in payment you will receive the increase in full. However, your first increase will be apportioned according to the number of months your pension has been in payment since the previous increase. When you reach state pension age or you are retiring at or after state pension age and you have pensionable service before 6 April 1997 your increase may be calculated in two parts and paid from two sources.
The state pension scheme pays an increase related to your guaranteed minimum pension with your state pension. This means that the Local Government Pension Scheme will pay an increase on the balance of your pension (i.e. your pension less your guaranteed minimum pension).
The Local Government Pension Scheme is responsible for paying up to 3% of the increase to that part of your guaranteed minimum pension that relates to any of your service after 5 April 1988.
This is rather complicated but it should be noted that the total increase you will get from both sources will be the same as if the Local Government Pension Scheme had paid all of it.