LGPS early retirement

k6chris

Looking at my employers policy on LGPS and came across this in the section on "Waiving all or part of any actuarial reduction"



xxxxxxx will consider applications for early payment of pension benefits, where a member retires voluntarily after age 55 but before their normal retirement age. Decisions will be made on the basis of:

• There being no financial detriment to xxxxxxx

• The operating requirements of xxxxxxx

I am curious to know what this is intended to mean, as I thought any waiving of actuary reduction will impose a 'strain' on the employeer and as such go against the first bullet point?? Has anyone come across similar wording and know what it actually means??

lazyred

They would look at the ongoing savings compared to the cost of waiving reductions to see if it is worth it for them.

I work for a local authority which has a similar voluntary early retreiment scheme. The policy includes the following:


NB: Owing to the high cost of allowing employees to retire early, applications are unlikely to be approved unless the cost can be offset by:
The deletion of the Post;
Significant down-grading arising from structural change; or
Some other exceptional circumstance.



The costs of early retirement where reductions are waived should be covered from savings over a period of 7 years

Silvertabby

Bit of guesswork here - but it looks like your employer may have just re-worded their LGPS policy document to reflect the earlier possible retirement date of 55 (from 60) without considering all the implications.

ie, pre 2016 it may have been possible for someone to retire (at 60) with full Rule of 85 protections - hence no financial detriment to the employer.

Anyone retiring now will only have partial R85 protections (if any) - and so the decision to waive 'all or part of actuarial reduction' will have to be made in each case.

Apodemus

You probably also have to take that wording in context. In my scheme, the very similar wording is part of the section that talks of unreduced pension when offered voluntary redundancy/early retirement. It simply makes it clear that the authority can use the option where the figures stack-up for it, but refuse a request if they don’t.