Early Retirement
Retirement from Age 55 and Before Age 60
Early Retirement with Employer's Consent
If you leave your employment and are aged 55 or over and under 60 you have a right to apply to your employer for the release of your pension benefits. Your employer has absolute discretion as to whether or not they will release your benefits early and they should have a policy statement that sets out how they intend to use this discretion available to them under the LGPS Regulations.
Therefore, for benefits to be paid before the age of 60 you must have your employer's consent. Your benefits may also be reduced if you do not satisfy certain conditions, although your employer does have discretion to waive this reduction at their cost.
Redundancy
If you are made redundant, are aged 55 or over and have at least 3 months membership of the Scheme (or if you have less than 3 months membership but have transferred previous pension rights into the Scheme), you will become entitled to the immediate payment of your LGPS benefits. At their discretion, your employer can award you with up to 10 years additional membership to improve your retirement benefits. They can also grant you up to £5,000 extra annual pension. These are discretions your employer can use if they so wish and they will publicise their policy on this for your information.
Regardless of the 85-year rule, your benefits will not be reduced if you retire early due to redundancy.
For more information on redundancy retirement please visit our Redundancy- FAQs section.
Efficiency
This is a term used when it is efficient for your employer (they make savings) to retire you early. This may be as a result of a re-structuring exercise or job evaluation exercise for example. If you are aged 55 or over and have at least 3 months membership of the Scheme (or if you have less than 3 months membership but have transferred previous pension rights into the Scheme), you will be entitled to the immediate payment of your LGPS benefits.
Regardless of the 85-year rule, your benefits will not be reduced if you are retired early on efficiency grounds.
Retirement at Age 60 or Between the Ages of 60 and 65
Since the introduction of amending regulations in 2006 the date from which your benefits can become payable depends on a number of factors. This is because those regulations removed the 85-year rule with effect from 1 October 2006. Protection has, however, been given to benefits based on membership built up until 31 March 2008. If you will be 60 before 1st April 2016 (i.e. born before 1st April 1956) then you will have your benefits protected right up to 31st March 2016. If you will be 60 between 1 April 2016 and 31 March 2020 you will also receive some protection.
Benefit Reduction Table for Early Retirement
|
Number of Years Early |
Pension Reduction Males |
Pension Reduction Females |
Lump Sum Reduction |
|
0 |
0% |
0% |
0% |
|
1 |
6% |
5% |
2% |
|
2 |
11% |
10% |
5% |
|
3 |
16% |
15% |
7% |
|
4 |
20% |
19% |
9% |
|
5 |
24% |
23% |
12% |
|
6 |
28% |
27% |
14% |
|
7 |
32% |
30% |
16% |
|
8 |
35% |
33% |
18% |
|
9 |
38% |
36% |
20% |
|
10 |
41% |
39% |
22% |
|
11 |
44% |
42% |
24% |
|
12 |
47% |
45% |
26% |
|
13 |
50% |
47% |
27% |
|
14 |
52% |
49% |
29% |
|
15 |
54% |
51% |
31% |
If you are unclear about when your benefits are payable or the amount of reduction that may apply please contact the pension team directly on 0845 6027237 or e-mail info@berkshirepensions.org.uk
