Thinking about retirement
How can I get an estimate of pension?
Can I take a lump sum at age 55 without taking the rest of my pension?
I am age 55 and want to take flexible retirement can I remain working by reducing hours or pay?
What is ill health retirement and how do I apply?
I may be made redundant or leave due to business efficiency, how will this affect my pension?
What is the reduction if it is paid early?
What is the Rule of 85 protection?
I want to take my benefits, how do I apply?
Leave your job and take pension early
If you are age 55 or over, you can choose to take your pension before your Normal Pension Age (linked to State Pension Age with minimum of age 65). Your benefits will normally be reduced for early payment. If you were paying in to the LGPS at any time between 1 April 1998 and 30 November 2006, some or all of your benefits paid early could be protected from the reduction if you have rule of 85 protection. Please remember, if you have any Rule of 85 protection, this will only apply if you take your benefits after age 60.
Take your pension without reduction
Your pension can be paid in full when you reach your Normal Pension Age (linked to State Pension Age with minimum of age 65).
If you take it later, it’ll be increased because it’s being paid later. You must take your LGPS benefits before your 75th birthday but can keep working and paying. It will also be enhanced for late payment. The factors for late payment are set by the Government’s Actuary Department and can change.
How can I get an estimate of your pension?
Using the pension calculator to estimate your pension
You can see how much pension you may be paid if you use our online service. You can choose any date from age 55 onwards.
Step 1 Sign in or register for My Pension Online at www.lpf.org.uk/online. You will also find a video to show you how to use the calculator.
Step 2 Go to Pension Benefit and choose Benefit Projectors then Voluntary Retirement from age 55.
Step 3 Change the date to when you want to receive your pension and amend the pay if necessary. Click calculate.
Step 4 Your figures for that date will be shown and along with any reduction that may have been applied for early payment.
- age 55 or over - your pension benefits will be paid on leaving without reduction for early payment. You can’t delay the payment until later.
- under age 55 (or age 50 if in the Scheme on 5 April 2006) and you accept voluntary redundancy, your pension will be deferred. Payment can then be made any time after age 55.
Ill-health benefits can be paid at any age and are not reduced on account of early payment - in fact, your benefits could be increased to make up for your early retirement. There are graded levels of benefit based on how likely you are to be capable of obtaining gainful employment after you leave. The different levels of benefit are:
- If you have no reasonable prospect of being capable of gainful employment before State Pension Age, ill-health benefits in the new scheme are based on your membership built up to the date of leaving plus all your prospective membership from leaving to State Pension Age. In other words, your pension will be based on the membership you would have had if you had stayed in the Scheme until your Normal Pension Age.
- If you have a reasonable prospect of being capable of gainful employment before State Pension Age, ill-health benefits in the new scheme are based on your membership built up to leaving plus 25% of your prospective membership from leaving at Normal Pension Age. Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.
If you have to leave work because of ill-health but you do not qualify for ill-health retirement benefits because you are not permanently incapable of carrying out your job, then your employer may be able to make to make a one-off lump sum payment to you. If you wish to be considered for ill health retirement, contact your employer.
What is the reduction made for early payment?
Reduction factors apply when you take your pension before your Normal Pension Age. (Subject to Rule of 85 protections if you have meet the criteria. The Rule of 85 Protection protects some or all of your benefits from the normal early payment reduction.) If you take your pension at your Normal Pension Age, no reduction is applied. The reduction that would be applied depends on the number of years before your Normal Pension Age you decide to take your pension. The pension calculator within My Pension Online shows any reduction that would be applied. You can log in or register at www.lpf.org.uk/online where you will also see a video on how to use the calculator.
What is my Normal Pension Age
Normal retirement age for the scheme is linked to your New State Pension Age. For all benefits accrued up to 31 March 2015 Normal Retirement Age of 65 is retained. All benefits after 1 April 2015 now have a Normal Pension Age date of your New State Pension Age. State Pension Age can be changed by the Government therefore your Normal Pension Age for Post 1 April 2015 benefits may change. You can retire from age 60 but your benefits may be reduced as they are being paid early. There is protection for members in before April 2015. The benefits built up before April 2015 will keep their Normal Pension Age, which for most members is Age 65.
What is the Rule of 85 protection
The Rule of 85 allowed members to retire after age 60 without any reduction to their pension where their age and length of scheme membership (in whole years) added up to 85. The rule was removed from the scheme regulations with effect from 1 December 2006. However, certain protections remain in place for members who joined the scheme prior to this date.
Protection for members in before April 2015
When you retire, your benefits will be worked out for the period you were in the Scheme depending on when you joined. All benefits built up before April 2015 will be worked out on your final pay at leaving or retirement.
If you joined before 31 March 2009, your pension benefits will be worked out in three parts – A, B and C
If you joined after 1 April 2009, your benefits will be work out using B and C
A) Membership built up to 31 March 2009:
Annual pension = final pay x scheme membership to 31 March 2009 x 1/80th
Lump sum = final pay x scheme membership to 31 March 2009 x 3/80th
B) Membership built up between 1 April 2009 and 31 March 2015:
Annual pension = final pay x scheme membership from 1 April 2009 to 31 March 2015 x 1/60th
Lump sum - no automatic lump sum but you can swap annual pension for lump sum at rate of £1 to £12
C) Member built up from 1 April 2015:
Annual pension = pensionable pay received each year x 1/49th
Lump sum - again no automatic lump sum but swap still available at £1 annual pension for £12 lump sum
You can view your benefit forecast using the online service My Pension online.
How do I apply for my benefits?
If you wish to retire and are paying into the Scheme, let your employer at least four weeks before your retirement date. You can read more on the steps to retirement here.
If you decide you wish to retire you should follow the steps below:
• Get a quote
- Use the My Pension Online service to run estimates at the dates you are thinking of retiring. You will also see a video on how to use the calculator. To use the projectors, log in, choose 'benefit projectors' from the 'Pension Benefits' tab. The estimate will be based on the information held for you by the Fund so it is important that you check your pay and other details are correct. Your employer is only asked for final figures on actual retirement or where you find an error. Any reduction for early payment will be included in the information shown. Click here for instructions on how to use the benefit estimator. Please note: AVCs are not included as the value of these are not known until retirement.
- Your annual benefits statement shows your benefits estimated at your Normal Pension Age (NPA) (equal to your State Pension Age). Your benefits may be reduced if you take them before your NPA.
• Tell your employer when you are retiring
Once you have decided you are going to retire you should tell your employer. Your employer will let the Fund know the date of your retirement and provide your final pay. We expect to be informed at least 4 weeks prior to your retirement but there can be delays. Occasionally you may need to contact your employer to remind them to send the forms in for a retirement as any delay can mean you receive your benefits late.
You can now request payment of your deferred pension benefits through my Pension Online. You can watch a video showing the process of getting an online estimate then requesting payment for those who are approaching age 55 or over.