85 year rule

spanglish18

Hi, I would like some advice on the above. I qualify for the 85 year rule when I'm 60, currently 53. i understand that any contributions made before 2008 are protected. I have used the LGPS pension calculator and it makes very little difference whether I retire at 59 or 60, just the usual increase that you would expect to see if taking your pension 6/12 months later.

I thought that the 85 year rule was automatically factored into the calculations if it applied to you after 60, is this correct? And if so why is it making very little difference to the figures before and after 60?

I contacted the helpdesk at LGPS and they were unable to help as said it was a specialist question. They advised me to speak to my employer but I've had no luck getting hold of anyone that knows anything.

Any words of advice/insights would be very welcome

Silvertabby

Did you join the LGPS before 1 October 2006? This is a crucial question.

Are you still a contributing member of the LGPS? If not, when did you join, when did you leave, and do you have a gap in your record (ie, one period of service, a gap, then another period of joined service).

If you are still contributing, will you have 25 years of unbroken service at age 60?

spanglish18

Hi Silvertabby,

Thanks for your reply. I have been a contributing member since 1991, I haven't left yet. I already have over 30 years unbroken service and will be well over the 85 years once i'm 60

Silvertabby

Then, at 60, your pre 2008 accruals will be unreduced. Note that although you will technically meet R85 before age 60, 60 is the minimum age criteria for unreduced pension benefits, so any calcs you may run for retirement before then will show a pre 2008 reduction.

Are you saying that your on line calcs for age 60 are also showing a pre 2008 reduction? If so, I'm inclined to suspect that the self-service software doesn't fully support the nuances of R85, and so may not pick up the no-reduction until you have actually reached age 60.

spanglish18

Thanks. I thought the the LGPS online calculators were supposed to include the 85 year rule, when it applies, therefore i would expect my pre 2008 contributions to be unreduced. However when i calculate retiring at 59 and 60, it makes very little difference. I was expecting that if the 85 year rule kicked in I would see a reasonable difference in calculations but I'm seeing the same difference between 57-58, 58-59, 59-60, if that makes sense.

The online estimates dont give you a breakdown of how the final amount is calculated so i have asked for a quote to be posted out to me, I understand that this will give more details about how each part of the pension is calculated.

Just wondered if i was missing something and the difference between 59 and 60 wouldnt be significant anyway even wit the 85 year rule coming into play.

Lemon_dr1zzle

The difference won’t be that significant.
With regards to your pre 2008 you would have a one year reduction at 59 which is currently 4.9% off your pension and 1.7% off your automatic lump sum.

Sarahspangles

https://forums.moneysavingexpert.com/discussion/comment/82007170#Comment_82007170

I have two LGPS pensions with different authorities. Although they are neighbours, they use different software and the capability of that software is different. Only one can give me an estimate of my pension including my R85 entitlement.

There is a significant difference for me if I retire at 60 rather than 59-and-three-quarters, but that may be because I only have a few months’ service after the key date in 2008, so almost all my pension is eligible for payment unreduced.

Laycity

is NRA for pre 2008 service 60 or 65 @Silvertabby?

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/82009025#Comment_82009025

65. But those who meet R85 at age 60 are able to take their pre 2008 benefits unreduced.

daveyjp

There may also be local agreements to reduce the R85 unreduced benefits age to 55. This was common during austerity when council's were reducing headcounts + two of my mates were beneficiaries, both retiring in their late 50s.

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/82009448#Comment_82009448

Employer discretion for normal retirements - but as rare as hen's teeth, as the employer would have to meet the full strain costs of paying unreduced benefits early.

Different non-discretionary rules apply in the cases of:

Redundancy. Zero early payment reductions in the case of both pre and post 2008 accruals.

Flexible retirement. If R85 is technically met before age 60, the employer has to pay the strain costs to allow pre 2008 accruals to be paid unreduced. Post 2008 accruals incur normal employee reductions.