LGPS 85 year rule

Maria2512

Hi,

I reach the magic 85 years aged 59!

Does that a make difference to anything or does it only kick in when I am 60?

Thanks

Silvertabby

R85 is still linked to the old minimum retirement age of 60, so could you hang on until then in order to get the full benefit?

I assume you know that it only applies to your pre 2008 service.  If you leave at 60 your 2008 to 2014 benefits will be reduced for being taken 5 years early, and your post 2014 benefits will be reduced for being taken 6/7 years early (before SPA).

Andy_L

It means that, if your employer agreed, you could retire now with an unreduced (pre 2008 service) pension rather than having to wait until 60.

The chance of them agreeing is slim

Silvertabby

Andy_L said:

It means that, if your employer agreed, you could retire now with an unreduced (pre 2008 service) pension rather than having to wait until 60.

The chance of them agreeing is slim

Hens, teeth and rare are the words that spring to mind here.  In nearly 20 years, I don't recall one example of an employer picking up any strain costs if they didn't have to.  

Note that if the employer agreed to FLEXIBLE retirement before 60, then they would have no option but to pay for the R85 pre 2008 benefits to be paid unreduced.  This is why many flexi requests are denied until after 60, when no employer costs would apply.

sevenhills

"If you would not satisfy the 85 year rule by the time you are 65, then all your benefits are reduced if you choose to draw your pension before your Normal Pension Age. The reduction will be based on how many years before your Normal Pension Age (age 65 for pension built up to April 2014 and before your State Pension Age for pension built up from April 2014) you draw your benefits."

But how much will it be reduced, is it worth holding off in drawing your pension to 67?
I expect to start drawing it, I am 60 and still working, I do have a small SIPP, but it is only worth £17k

I started work for the local authority in 2007, earning a relatively low wage.

What is the reason for the reduction, just to encourage workers to stay and work longer?

Silvertabby

sevenhills said:

"If you would not satisfy the 85 year rule by the time you are 65, then all your benefits are reduced if you choose to draw your pension before your Normal Pension Age. The reduction will be based on how many years before your Normal Pension Age (age 65 for pension built up to April 2014 and before your State Pension Age for pension built up from April 2014) you draw your benefits."

But how much will it be reduced, is it worth holding off in drawing your pension to 67?
I expect to start drawing it, I am 60 and still working, I do have a small SIPP, but it is only worth £17k

I started work for the local authority in 2007, earning a relatively low wage.

What is the reason for the reduction, just to encourage workers to stay and work longer?

R85 ended for new joiners after October 2006, so you have zero entitlement, I'm afraid.  Even if you had joined a year earlier, at your age any transitional protections would have been limited to your pre 2008 service. 

Andy_L

sevenhills said:

"If you would not satisfy the 85 year rule by the time you are 65, then all your benefits are reduced if you choose to draw your pension before your Normal Pension Age. The reduction will be based on how many years before your Normal Pension Age (age 65 for pension built up to April 2014 and before your State Pension Age for pension built up from April 2014) you draw your benefits."

But how much will it be reduced, is it worth holding off in drawing your pension to 67?
I expect to start drawing it, I am 60 and still working, I do have a small SIPP, but it is only worth £17k

I started work for the local authority in 2007, earning a relatively low wage.

What is the reason for the reduction, just to encourage workers to stay and work longer?

The reduction is to make up for the fact that your pension will be paid for more years. eg, in your case, you will get paid bit less pension but will have it paid for 5 more years so it should, on average over all pensioners, even out