Minimum retirement age in 2010

cornerstone13

I have a question, if any of you very clever pension people can help me please. I am in a company final salary scheme and expect to be made redundant within the next year to eighteen months.

Can you confirm that the most recent Pensions Act effectively forces private schemes to increase the minimum retirement age from 50 to 55, whether they want to or not - this is the subject of much discussion between OH and myself !!

I know the Act states that the minimum retirement age will change from 50 to 55 in 2010 - is that for people who become 50 during or after 2010 only, or would someone like myself who will be 53 in 2010 be affected. In other words, do I need to try to take redundancy before 2010 or after 2012 (when I will be 55) to be sure of being paid my pension on redundancy.

I've looked at various government and pension websites but can't find an answer - they just state when the rise will take place, but not who it will affect.

Many thanks

CLAPTON

after april 2010 you will have to be at least 55 to take a pension.
before april 2010 you must be at least 50 to take a pension.

so in your case you can take a pension now but if you wait until april 2010 then you will need to wait until you are 55.

MikeJones_2

Hi cornerstone13,

Whether you can take you pension before you Normal Retirement Date will depend up the Scheme Rules (and may also require the consent of the sponsoring employer).

A similar question about Early Retirement in 2010 is covered in this thread which might help you.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

cornerstone13

Thanks for your replies and I've looked at the other thread. The rules of our scheme currently allow unreduced pension in the case of redundancy from the age of 50, so if I was made redundant now (or before 05.04.10) I know that I would be able to take my pension immediately.

I wanted to check the new legislation to know if I need to push for redundancy before 05.04.10 as, after that date, it seems there would be a window of about 2 yeas (when I'm 53/54) where I would miss out on the pension if I was made redundant then. From what you've said this would be the case, unless I can get the right protected as you mentioned in the other thread.

Thanks for your help

jonathon_hart

Hi.

To have the right to retire before age 55 after April 2010 then it must be written into your contract of employment that you have a Normal Retirement Age of 50. This must have been written in prior to April 2006 (I think December 2005 was the cut off). There is no way now for you to protect a right to retire at age 50.

There are very few people around who will have this right. (The only others are people who are in various short-lived occupations where you naturally retire from that occupation early in life - again these exceptions are very rare though so don't go relying on any of these either.)

Note I've popped an edit on my post in the other thread to add this as well - so it is clearer for anyone else who reads it in the future.

Jonathon

cornerstone13

The NRA for us is 60. Employees can apply to the Trustees for early retirement from age 50 or (as with me), an unreduced pension will be paid in the case of redundancy from age 50, or in the case of ill health retirement.

So if I have understood correctly, the Pensions Act will 'force' the scheme to raise the age from 50 to 55, and I need to be made redundant before 05.04.10 or risk losing several years of pension payment?

jonathon_hart

You would have to take your pension on or before 5.4.2010 or yes you would have to wait until you are 55.

traineepensioner

cornerstone13,

There is provision, within the act, to allow pension scheme members to still retire before 55 (after 2010)..... Providing that "they had an absolute right specified in the scheme rules to retire before 55 and that right was in existence before 10th December 2003".

I would check your pension schemes rules to see if this applies.

pp

jonathon_hart

That is what I was referring to above. It must be written in your contract of employment.

traineepensioner

Hi Jonathon,

Now I'm now a bit worried ..... Like cornerstone13 my NRA is 60. However, My pension scheme rules (BT) allow you to take actuarailly reduced benefits from the age of 50 by applying to the trustees (redundancy/medical retirement give enhanced terms with no actuary reduction).

My contract of employment states a NRA of 60, but the pension trustees say that I have protected rights.

Does this sound right to you?

Thanks, pp

jonathon_hart

Protected Rights is a type of contracting out (from SERPS/ State Second Pension) that has been used post 1997. It is something completely and utterly different.

Based on what you said above post 6/4/2010 you will not be able to retire until age 55.