Actuarial Reductions - LGPS Advice

EC_Driver

Myself and two colleagues are helicopter pilots with the police. We are all in the age bracket (54-58 years old) and have been members of the Local Government Pension Scheme (LGPS) for a number of years. Our employment as pilots is controlled by the Civil Aviation Authority (CAA) who state that we cannot fly single pilot aircraft (police helicopter) post our 60th birthday. We have been informed by our employer, XXXX Police that on reaching our respective 60th birthdays our employment will be terminated by means of "voluntary retirement" and should we wish to take our pensions early, i.e. at 60 years old as opposed to 65 years old then these will be subject to an actuarial reduction of 25% and any lump sum reduced by 14%. Is this correct? Surely, as we are being forced to retire purely due to reaching 60 years of age and not being able to continue employment because of a CAA Directive, this should not warrant the actuarial reduction of our pensions? In effect we are being made redundant. I would be most grateful if you would kindly offer any advice as how we should address the situation we find ourselves in.

xylophone

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

Could you make a case under "business efficiency?" Have you consulted your Union?

Andy_L

It would be unlikely that they could force you to take "voluntary" retirement (the clue being in the name) however your contract when you joined may have anticipated this problem and specifically written in that you have to leave at 60 & get no enhancement to pension to make up for it.
Are they prepared to offer you another, non-flying, post for the next 5 years?


As xylophone says your best bet is the business efficiency card

Devon & Cornwal Police specifically mention pilots as having a compulsary retirement age of 60. Does your force say something similiar

http://www.devon-cornwall.police.uk/JoinUs/PoliceStaff/RecruitmentProcess/Pages/InformationForCandidates.aspx

jamesd

It appears that from the nature of your job, the correct normal retirement date has to be age 60 unless the force is going to be routinely providing other work for its pilots when they can no longer fly. Calling this voluntary retirement is crazy, the pension arrangement needs to respect reality. Seems like a good one for the union to negotiate with the employer to get some more appropriate arrangement in place that actually fits the requirements of the job.

You might also ask your local MP to investigate since this is pretty clearly something of non-local interest that requires special case handling due to the nature of the job.

That might be too late for you. Whether it is or isn't, the usual way those in private sector employment handle this is with things like savings inside a stocks and shares ISA that can bridge the income needs for the years between actual retirement and the time when a pension can be taken without actuarial reduction. Same for public sector employment, though perhaps less expected to be routine there because the normal retirement dates have often been younger.

atush

If retirement is compulsory, then they can't actuarially reduce the pension?

Talk to your union and let us know- this is an interesting case.

hyubh

jamesd wrote: »

Same for public sector employment, though perhaps less expected to be routine there because the normal retirement dates have often been younger.

Not really 'often' given the context is the LGPS - the scheme's normal retirement age has always been 65, however it might have been from 60 in the past if the member had enough service (used to be 25 years).

hyubh

EC_Driver wrote: »

In effect we are being made redundant. I would be most grateful if you would kindly offer any advice as how we should address the situation we find ourselves in.

I'd be a bit surprised if this hasn't come up before in your line of work, given even historically a job having a normal retirement age of 60 wouldn't have always meshed with the LGPS' own normal retirement age rules.

That said, if your employer called it 'redundancy' (even 'voluntary redundancy'), then they would have no choice but to pay a 'strain charge' to the pension fund to avoid the actuarial reduction (it's in the scheme rules) - it's if you just leave that they don't.

Do you know what they have done in the past, e.g. have they offered redeployment to your predecessors? As you say, HR or whoever it is talking of terminating your employment by means of 'voluntary retirement' sounds either gibberish or deliberately trying to avoid a strain charge.

atush

Is it just me who finds it odd police H Pilots are on LGPS instead of Police pensions?

At least they had younger retiral options that would fit in the with the CAA regs.

mgdavid

atush wrote: »

Is it just me who finds it odd police H Pilots are on LGPS instead of Police pensions?

At least they had younger retiral options that would fit in the with the CAA regs.

like many police support services these are probably civilian jobs.
i.e they 'fly a police helicopter', they are not 'policemen who fly helicopters'.

EC_Driver

Thank you all very much indeed for your replies.

Surprisingly, this has not been addressed before by the LGPS as in the past the majority of police helicopter pilots were supplied by a contractor. It is only in the last 15 years or so that some police forces directly recruited their own civilian pilots.

Myself and my two colleagues are not members of any union.
Fortunately, I am just over 5 years away from my 60th birthday but my two colleagues are a bit closer to theirs so it would be good to resolve this issue sooner rather than later.

In the letter from the HR Department we were given 3 options:
Option 1 - Resign with NO access to pension until 65.
Option 2 - VOLUNTARILY retire at 60 and access your pension with a 25% actuarial reduction & a 14% reduction to your lump sum.
Option 3 - Seek employment within XXXX Police Force if and when a suitable alternate employment vacancy arose - which is great if you live in that area. We all live 100 miles plus away.

Or finally Option 4 - If you don't take any of the above 3 options "....dismissal if a possible option".

It would appear that the LGPS Regulations are set in stone and do not take into account the situation that we find ourselves in.
I will certainly look into the "business efficiency" and "redundancy" routes in my quest to resolve this.

I have already tried The Pensions Advisory Service who stated "The only thing I can suggest is that you raise the matter with the employer to see if they are prepared to cover the cost of removing the reduction given your situation".

Once again, thanks for all your replies. They have all been a great help. Any further advice on how to tackle this problem would certainly be appreciated.

rpc

I think you are (quite unfairly) between a rock and a hard place.

Statutory restrictions are a fair ground for dismissal, so it wouldn't have to be redundancy. You would be a helicopter pilot who is not permitted to fly a helicopter and probably in the same situation as a lorry driver who lost his licence.

Your options do seem to be limited to resignation, retirement or dismissal.

I echo the suggestion of others to get your MP involved as this is clearly a silly situation where you are effectively required to retire before normal retirement date. It might also be worth raising it with the Police and Crime Commissioner for the force.