Early and late retirement, redundancy and efficiency

Choosing to retire

The normal pension age in the LGPS is age 65 or State Pension age if later. Employees can choose to leave work and retire any time from age 55.

An employee's pension will be reduced if they choose to retire before their normal pension age
An employee's pension must be paid by age 75, even if the employee continues to work
Your discretions policies must cover whether or not you will consider waiving the reductions that may apply to employees' and former employees' pensions, and whether or not to switch on any 85 year rule protections that may apply

Redundancy and efficiency

Under age 55

A member who is under 55 and made redundant or dismissed on efficiency grounds will not be entitled to an immediate pension and will have a deferred pension.

Over age 55

Pension is paid immediately, unreduced, if an active member is aged 55 or over and made redundant or dismissed on efficiency grounds.

There is normally a cost to the employer for all cases of redundancy between 55 and normal pension age. You can only find out the cost if you request an estimate
The pension must be paid – the member cannot have a deferred pension

Additional benefits on redundancy

Instead of being paid as cash, employees can use any redundancy payment in excess of the statutory amount to increase their pension.

The member must request this through their employer before they leave
The employer must have a published policy that covers this, although it is not related to the LGPS discretions policies

Employers may choose to award additional pension, subject to their discretions policy.

Forms and guidance