LGPS redundancy pension reductions

Maria2512

Hi,

I started LA in 2000 and looks like there will be voluntary redundancies in my section next March. I will be 58 and will take it if my maths add up. I was planning to take ER at aged 60. 

My questions are, will all my pension accrued to date be paid in full or will there be any actuarial deductions? Or are there different rules for pre 2008 etc? Also will the lump sump for pre 08 be paid in full? Is there anything else I need to factor in? I guess I have a busy year ahead !

Thanks

MX5huggy

Depends on how sweet your LA wants to make the deal. We’ve just done a round of voluntary severance. If accepted you got all your pension unreduced. Plus the redundancy payment. 

At 58 planing to go at 60 it was a no brainier, problem was proving the saving to the LA within 2 years. 

Silvertabby

With that amount of service, your employer's redundancy costs will be HUGE.  

I do hope you haven't broadcast that you intend going on voluntary retirement at 60, as the cost of keeping you on for those two extra years could well be less than the cost of your redundancy package, including the employer's pension strain costs.

Kernowshep

If you can get voluntary redundancy without actuarial reduction that's worth a fortune.  Below is from the LGPS website, but also check your organisations pay policy statement, there will be other info in there including things like their rehire policy.

https://www.lgpsmember.org/your-pension/the-essentials/key-features/#:~:text=Redundancy and efficiency retirement,the two year vesting period.

Redundancy and efficiency retirement

If you are made redundant or retired in the interests of business efficiency when you are over age 55, you will receive immediate payment of the pension you have built up – providing you have met the two year vesting period. Any additional pension you have bought would be reduced if you are under your Normal Pension Age when you retire.

The earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.

End.

This link from a council explains it as well (I presume the terms are the same across the LGPS).

https://www.oxfordshire.gov.uk/business/oxfordshire-pension-fund/pension-scheme-members/active-members/retiring-due-ill-health-or-redundancy/redundancy-aged-over-55

Edit: I'm not sure why it's gone bold at the top 🤷

Maria2512

Thanks for the replies

 @Silvertabby Thanks for the heads up I will not broadcast the 60 bit!!

otb666

Yes I managed to get VR at 55 and 6 months.  I was only part time but got pension with no reduction and 2 years severance tax free together with lump sum outta pension tax free. It was a no brainer even though 7.5 years early. A few of my colleagues in same position stayed which I could never work out why. I was going to leave at 55 anyway so was a sweet deal for me. Paid off mortgage and credit cards and really enjoy my freedom now