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EARLY RETIREMENT FOR COUNCILLOR MEMBERS
Can I retire early?
If you have at least three months total membership or have brought a transfer value into the LGPS you can elect, in writing to your employer, to retire and receive your LGPS benefits at any time from age 60 onwards.
If you are aged 50 to 59 you may be able to retire from office and receive payment of your benefits immediately but payment of benefits before age 60 is only possible with your council’s consent. This is a council discretion and under the LGPS your council’s policy with regard to this must be included on their Policy Statement.
Will my pension and lump sum be reduced if I retire early?
If you join the LGPS after 30 September 2006, retire and elect to receive benefits before age 65 your pension and lump sum, initially calculated as detailed in the section on Retirement Benefits, will be reduced to take account of being paid for longer. How much your benefits are reduced by depends on how early you draw them.
The reduction is calculated in accordance with guidance issued by the Government Actuary from time to time. The reduction is based on the length of time (in years and days) that you retire early – i.e. the period between the date your benefits are paid to age 65. The earlier you retire, the greater the reduction.
As a guide, the percentage reductions, issued in October 2006, for retirements up to five years early between and including the ages of 55 and 65 are shown in the table below. Where the number of years is not exact, the reduction percentages are adjusted accordingly.
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No. of Years paid Early
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Pensions Reduction Men
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Pensions Reduction Women
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Lump Sum Reduction
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0
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0%
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0%
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0%
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1
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6%
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5%
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2%
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2
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11%
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10%
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5%
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3
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16%
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15%
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7%
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4
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20%
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19%
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9%
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5
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24%
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23%
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12%
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If you joined the LGPS before 1 October 2006 and would have at least 21 years scheme membership if you stayed in the scheme to age 65 you will:
- have some protection from the reduction in respect of benefits you build up in the Scheme up to 31 March 2016 if you will be 60 by then, or
- in any other case, have some protection from the reduction in respect of benefits you build up in the Scheme up to 31 March 2008 (and, if you will be 60 between
1 April 2016 and 31 March 2020, you may have some further protection on a sliding scale in respect of benefits you build up between 1 April 2008 and 31 March 2020 provided your combined age and scheme membership, both in whole years, would be 85 or more by 31 March 2020
Your council can agree not to make any reduction on compassionate grounds. This is a council discretion; you can ask your council what their policy is on this matter.
If you voluntarily retire before age 65 you do not have to receive immediate payment of your benefits and can defer them within the LGPS for payment at a later date.
| Please Note | |
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If your council gives consent to immediate early retirement benefits on or after age 50 and before age 60 your pension will be increased each year in line with the Retail Prices Index except that if the benefits are paid before age 55 your pension will be paid at a flat rate until age 55. At that time it will be increased by the accumulated effect of inflation since you retired.
If your pension benefits are subject to a Pension Sharing Order issued by the Court following a divorce or annulment of marriage or the making of an order for the dissolution or nullity of a civil partnership, or are subject to a qualifying agreement in Scotland, your benefits will be reduced in accordance with the Court Order or agreement. |
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