A member can retire early from age 55. But, if they do, their benefits will be reduced for early payment. The amount of the reduction will depend on how early before normal pension age the member is taking their benefits.
If a member chooses to retire from age 60, and they meet certain criteria for the 85 year rule protections, the early retirement reduction applied may be tapered or not applied at all.
You can use your discretion to switch on the 85 year rule if the member is choosing to leave before age 60 but would've met the criteria at this age. If you do this, the member's benefits won't be reduced, but you'll have a strain cost to pay to make up for the missing contributions. If a member meets the criteria for the 85 year rule, but you don't switch it on, their benefits will be reduced. Any policies you have about the 85 year rule should be in your discretions policy.
What do we need to process an early retirement?
We'll need a completed PEN007A leavers form and a P45 if one is available. This should be sent so that income tax deductions can be assessed.