If you are an active member of the LGPS aged 55 or over you may wish to consider applying for flexible retirement. Rather than continuing in your job to 65 or later you can, with your employer’s consent, reduce your hours or move to a lower grade and draw some or all of your pension benefits whilst continuing in employment – enabling you to ease into retirement. You can continue paying into the LGPS to build up further benefits in the scheme and will do so automatically unless you opt out.
This leaflet tries to answer some of the questions that you may have about flexible retirement.
Do I have an automatic right to flexible retirement?
There is no automatic right to flexible retirement. Both the early release of retirement benefits and the reduction in contractual hours and/or grade are at your employer’s discretion. Each employer has their own policy on flexible retirement. If you are employed by the council or a school you can download the policy and procedure from OneBromley or obtain the information from Human Resources. If you are not employed by the council or a school you can obtain the policy relevant to you direct from your employer (e.g. from Bromley Mytime, Broomleigh, College, Academy, etc.).
What happens if my request for flexible retirement is turned down?
If your request to reduce your hours or move to a lower grade is refused you may ask your employer to review their decision. If your request for the release of your pension benefits is refused, as well as asking your employer to review their decision, you may also ask for a review more formally under the pension scheme Internal Disputes Resolution Procedure. This appeal will also be considered by your employer.
Will my benefits be reduced?
If you take flexible retirement, your pension benefits will normally be reduced for early payment.
Your employer may, however, determine not to apply all or part of any reduction.
If, however, you were in the LGPS on 30 September 2006, some of your benefits paid early on flexible retirement could be protected from the reduction if you are a protected member under the former ‘85 year rule’.
If I pay into the Pension Scheme on the reduced hours/grade, will my first period of membership count again?
The periods of membership used to calculate your benefits paid on flexible retirement will not be taken into account in any subsequent calculation of benefits.
Even if you are a protected member, the membership used to calculate your flexible retirement benefits will not count towards the ’85 year rule’ in respect of your continuing membership of the scheme. If you retire before age 65 your benefits in your continuing employment will be subject to reduction.
The benefits payable when you cease the continuing employment will normally be based on your earned pension during the period of your scheme membership from the day after the flexible retirement date to the final full retirement date.
You will not need the three month minimum period of membership to become entitled to benefits when you finally cease employment.
I have been paying AVCs/ARCs/APCs/purchasing Added Years – what happens if I am granted flexible retirement?
You would have to draw any additional benefits from ARCs (Additional Regular Contributions), APCs(Additional Pension Contributions) and Added Years at the date of the flexible retirement. You may also choose to draw your benefits from your AVC fund, or may defer those until your eventual full retirement.
What happens if I die in service during my continuing employment?
If you have continued to pay into the pension scheme, death-in-service benefits will be payable consisting of a death grant (provided you are under 75) of three times your pensionable pay, plus pensions for your dependants, based on your earned pension in the continuing employment, plus
Irrespective of whether you have continued to pay into the pension scheme, a death grant (provided you are under 75) of the balance of ten years’ pension paid to you on flexible retirement, plus pensions for your dependants based on your earned pension in the employment from which you have taken flexible retirement.
What happens if I retire on ill-health during my continuing employment?
If you become permanently incapable of working in your continuing employment due to ill health and have a reduced likelihood of obtaining gainful employment before age 65, your employer may retire you on grounds of ill health. Your pension will be based on your earned pension in the scheme post flexible retirement.
Will my pension be reduced (abated) because of my earnings in the continuing employment?
If you receive payment of your benefits on flexible retirement, then irrespective of the amount of your earnings in continuing employment your pension will not be subject to reduction or suspension for continuing employment whilst you are in a job with the employer that allowed you to take flexible retirement.
What happens if I move jobs to a different local authority employer?
If you are granted flexible retirement and subsequently move to a new employer, then depending on the level of your earnings in your new job your pension may be subject to reduction or suspension, since you will no longer be employed by the employer that granted flexible retirement.
Will my retirement pension increase?
Your pension will be increased by the same percentage rate by which local authority pensions have increased since the pension commenced.
If you wish to consider flexible retirement, you should contact your Human Resources Department.
The national website for members of the LGPS can be found at www.lgps.org.uk
Disclaimer
The information in this leaflet applies to individuals who were contributing members of the Local Government Pension Scheme on 1 April 2014 or who have since joined. This leaflet was up-to-date at the time of publication in March 2023. This leaflet is for general use and cannot cover every personal circumstance, nor does it cover specific protected rights that apply to a very limited number of employees. In the event of any dispute over your pension benefits, the appropriate legislation will prevail as this leaflet does not confer any contractual or statutory rights, and is provided for information purposes only.
Text based on LGE Guide – Employees in England and Wales – April 2023
Bromley pensions team
Liberata UK Ltd
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