Pension at 54???

hyubh

gorjam wrote: »

Correct it is the LGPS.

In which case leaving the scheme following redundancy short of your 55th birthday will mean you won't be able to draw your LGPS pension until age 60 with reductions, or 65/slightly earlier (depends on how the 85 year rule works out in your case
[*]) without.

I have to say, assuming those 35 years of contributions you mentioned were all LPGS ones (or if not, were transferred to your current LGPS membership), it does look suspiciously like the employer is attempting to dodge a hefty strain charge. I'm kind of impressed by the cunning - not what you would expect from a public sector HR department...


[*] http://www.yourpension.org.uk/LPFA/Scheme/Scheme-details/Removal-of-the-85-Year-Rule.aspx

[Deleted User]

I thought it was the case that (if membership criteria are met) if folk left council employment over the age of 50 due to a decision of the employer, rather than a decision of the employee, they had to give you access to your pension without penalty?

WR

hyubh

Wild_Rover wrote: »

I thought it was the case that (if membership criteria are met) if folk left council employment over the age of 50 due to a decision of the employer, rather than a decision of the employee

No - it's been 55 for some years now.

[Deleted User]

hyubh wrote: »

No - it's been 55 for some years now.

Well unless the situation in Scotland is different - I know very well people under 55 who were members of the LGPS for decades who left within the past 6 months before the age of 55 under initiatives of the employers such as "VERA" (voluntary early release agreement) who were given access to their pension. It is obviously paid at a pro rata rate, but they had access to a lump sum and annual pension.

WR

hyubh

Wild_Rover wrote: »

Well unless the situation in Scotland is different

Looks like it is! Compare this

http://www.lgps.org.uk/lge/core/page.do?pageId=102180

with this

http://www.lgps.org.uk/lge/core/page.do?pageId=157931
http://www.lgps.org.uk/lge/core/page.do?pageId=1039325

The Scottish LGPS has an additional historical protection that means pre-April 2006 joiners can be only 50 to enjoy an employer-led early retirement.

It is obviously paid at a pro rata rate, but they had access to a lump sum and annual pension.

'Obviously'? I can't say what the second link I just gave describes is particularly 'obvious':

'If you retire early before age 55, your pension is normally paid at a flat rate until age 55, when it will be increased to the level it would have been, had it been increased by the rise in the cost of living every year since your early retirement.'

I can't think of anything in the 2008 scheme in England and Wales like that.

[Deleted User]

hyubh wrote: »

'Obviously'? I can't say what the second link I just gave describes is particularly 'obvious'

Hi hyubh - sorry, I should have been clearer - what I meant about the pension being reduced was that it was linked to length of service - the lump sum and pension for someone with say 31 years service would not be as high as someone with longer service. The lump sum stopped automatically growing in April 2009, with service after that date accruing higher benefits increasing the annual pension, some of which could be sacrificed at a 1:12 ratio to increase the lump sum.

Someone who is allowed by the employer to access the pension before 55 receives no annual inflation uprating until they become 55 years old, when I understand a "catch up" is applied.

With the public sector cuts employers have been circulating info to staff for years now seeking expressions of interest in schemes like VERA. I suppose they take the view that a volunteer is better than a compulsory redundancy.

Regards,

WR

hyubh

Wild_Rover wrote: »

Someone who is allowed by the employer to access the pension before 55 receives no annual inflation uprating until they become 55 years old, when I understand a "catch up" is applied.

Right. I understand what it is saying - I meant it isn't something I would have guessed applies given my knowledge of the LGPS as it currently works in England and Wales. Frankly, I find pretty much every deviation in the LGPS between north and south of the border difficult to give a rational explanation of, given current facts alone...

With the public sector cuts employers have been circulating info to staff for years now seeking expressions of interest in schemes like VERA.

Depends on the employer - I had never even heard of 'VERA' until you mentioned it. I'm more used to employer-specific voluntary redundancy packages.

I suppose they take the view that a volunteer is better than a compulsory redundancy.

Path of least resistance?

[Deleted User]

hyubh wrote: »

Path of least resistance?

Very probably - avoiding the dreaded "R" word helps with union relations but the unions in local government are so powerless these days I'm surprised the employers are concerned with them.

Still, those who have left - with a severance payment - seem quite content with the arrangements - and about 10 years younger too!!

WR

mark55man

To OP

Not quite sure I understand all of the above, but I think you should ask HR and you should ask your union to clearly spell out the consequences of taking redundancy before you are 55 and after you are 55.

Also you should make them be very clear what the position is wrt number of years of service, and any pension reduction for taking it early.

You should also check that even if redundant whether you are allowed to defer taking your pension for a year or two so that you do not get hit by any reductions (possibly living of the redundancy payout), as this will increase your pension from the point you get it

If you have a clue about your life expectancy (ie long lived or short lived relatives, or existing helath problems) then that might make you keener to have less money now than more money later. As I understand the maths it would take 18-20 years of payment (=life) before taking a 5% reduction a year early would be worse than waiting a year. Taking a 25% reduction for 5 years early would also break even at 20 years (after start of payment) but every year after breakeven you would be getting 25% less.

It is (I believe) acceptable for VR terms to be better than compulsory so you need to bear in mind that even if disadvantaged a little by the above you may still be better off than not applying and being made redundant anyway.

Finally - Your call about which of these is more suitable to your needs

Finally finally - I am just an amateur who is perhaps slightly better read than some - but this is complex both from pension and redundancy perspectives - make sure you get the best advice you can remembering HR are there to protect the department not to get the best result for you and that Union advice is generally terrible (from my personal experience). You should consider trying to find specialist advice

woolly_wombat

mark88man wrote: »

To OP

Not quite sure I understand all of the above, but I think you should ask HR and you should ask your union to clearly spell out the consequences of taking redundancy before you are 55 and after you are 55.

Also you should make them be very clear what the position is wrt number of years of service, and any pension reduction for taking it early.

http://www.lgps.org.uk/lge/core/page.do?pageId=102180

Early retirement through redundancy or business efficiency - Employees in England and Wales

If your employer makes you redundant or retires you in the interests of business efficiency and you are aged 55 or over, your benefits are payable immediately without reduction.

As jem16 has stated, this has already been covered in a previous thread:

https://forums.moneysavingexpert.com/discussion/4441833

The OP is therefore understandably keen to remain in employment beyond their 55th birthday!

Union reps, in my experience at least, are not always particularly on the ball!