Are you leaving on Redundancy or efficiency grounds?

Is your employer making you redundant, are you taking voluntary redundancy, or are you being dismissed on efficiency grounds?

If this is the case and:

you are at least age 55 and
you have paid into the LGPS for at least two years, including pension that you have transferred in

then the pension you have built up to date may be paid immediately, without early retirement reductions.

Only the pension account relating to the job role you are leaving on redundancy or efficiency grounds will be paid. If you have any additional LGPS pensions, they will not be paid at the same time.

There are a couple of other circumstances to be aware of:

If you are less than age 55 and/or have less than 2 years membership you will receive a refund of your pension contributions. See: leaving the LGPS before Normal Pension Age.
If you are less than age 55 and have transferred in pension benefits you will be awarded a deferred pension. See: your deferred pension.
Your pension benefits will not be paid if you opted out of the LGPS before being made redundant or leaving on efficiency grounds.

If you leave under a Mutually Agreed Resignation Scheme (MARS) then you will not be eligible to claim your pension without reductions. See MARS at the bottom of this page.

Note: The Government sets the earliest age at which you can access your pension savings under normal circumstances. This is currently age 55 as indicated above - however it is rising to age 57 from 6 April 2028.

What must I do?

1) Your most recent annual benefit statement shows the approximate value of your pension at 31 March, and this provides an indication of what you might receive if you retire due to redundancy or efficiency. However, do not use your statement to make any retirement or financial decisions.

If you would like a pension estimate, contact your employer and ask them to request an estimate for you.

You cannot ask for an estimate yourself because it is your employer's decision for you to retire on redundancy or efficiency grounds.

2) Your employer will give you a Retirement Declaration Form to fill in and send to Hampshire Pension Services. They will also send us the details we need to calculate your pension, along with their authority for your retirement on redundancy or efficiency grounds.

What to expect:

Once we have everything we need, it will take around six weeks to start paying your pension. We will write to you with more information when we have calculated it.

You can now view the progress of us bringing your pension into payment by using the 'Track my case' function on the Member Portal. This can be found in the menu bar at the top of the page once you have logged in. If you have not yet registered for the Member Portal, you can do so by visiting https://mypensionportal.hants.gov.uk

What will happen to my Additional Contributions?

If you pay additional contributions, the benefits from them will be paid along with your main LGPS pension.

AVCs - will be paid immediately, according to your instructions. They have to be paid with the rest of your pension and processing them could delay your pension by up to eight weeks.

APCs - the extra pension you have bought by your leaving date will be added to your main pension. If you are made redundant before your normal pension age then your APC will be reduced, even if the rest of your pension is not reduced.

ARCs - the extra pension that you have bought by your leaving date will be added to your main pension. The extra pension will be reduced if you retire before age 65, even if the rest of your pension is not reduced.

Added years - you can choose to pay to complete your contract before you retire. If you do not complete the contract, then the years and days of membership that you had bought by your leaving date will be added to your pension.

What about redundancy pay?

If you are made redundant and have worked for your current employer for 2 years or more, you will normally be entitled to statutory redundancy pay from your employer. Occasionally, an employer may pay more than this statutory minimum amount.

If you receive more than the minimum redundancy pay:

You may be able to use the excess to increase your LGPS pension. This will depend on whether your employer has a policy to allow it.
Your employer has access to a calculator that they can use to work out how much extra pension you can buy.
You can use all of the excess redundancy pay to provide extra pension, or none at all. You cannot use only a part for this purpose.
The above also applies if you are made redundant below age 55 and have two or more years membership, even though your pension will become deferred and not be paid straight away.
If you want to use excess redundancy pay towards your pension, you must notify your employer before your planned leaving date.

Mutually Agreed Resignation Scheme (MARS)

Your employer may offer you access to a MARS. If your application for resignation under this type if scheme is accepted then you will be able to claim your pension provided:

you are at least age 55 and
you have paid into the LGPS for at least two years, including pension that you have transferred in.

However, if you are under the Normal Pension Age (NPA) then your pension may be subject to early retirement reductions.

Unlike redundancy, a member who resigns under a MARS normally has no entitlement to unreduced pension benefits. You should refer to your employer with any questions on this.