Please make sure you've asked for figures from us before agreeing to a flexible retirement. There could be costs involved and you must take this into account before making a decision.
A member may be able to flexibly retire with your agreement. To receive their pension benefits and continue working, they must be over 55 and reduce either their hours or grade. The member must've been in their role for two years or more for flexible retirement to be considered.
There may be a strain cost to you, as the employer, if you allow a member to flexibly retire before their normal pension age. You must ask us for a quote if you receive a request.
An early retirement reduction will also apply to the member’s benefits if the 85-year rule protections aren't met.
What do we need to process a flexible retirement?
We'll need a completed PEN007A form, and a P45 if available. This should be sent so that income tax deductions can be assessed. We’ll also need a supporting document, such as a formal letter, agreeing the flexible retirement decision.
What happens if you agree to flexible retirement?
If you agree to flexible retirement the member must still draw their wages/salary from their job on the reduced hours or grade and continue paying into the LGPS, building up further benefits in the scheme. If the member does not wish to continue paying into the LGPS after flexibly retiring they must opt out of the LGPS. If they do not opt out, their LGPS membership should continue automatically in their job on the reduced hours or grade. If the member does not want their pension contributions deducted immediately after flexibly retiring, they must let you know before the retirement takes place by completing an opt out form. The member must not specify an opting out date earlier than the reduction in hours/grade takes effect (i.e. the date of their flexible retirement), or they may invalidate the flexible retirement.
Is a member thinking of flexibly retiring?
If you have a member that is thinking of flexibly retiring they should contact us for a quote of the benefits they could get, or log into ‘My Pension Online’. They can also use ‘My Pension Online‘ to run quotes on converting their annual pension to provide a lump sum if this is a retirement option that they are considering.