Redundancy And Efficiency Retirements
These pages are for employer use only. Member information can be found on the home page.
Pension benefits are payable at any age from 55 if the employer certifies that termination is on the grounds of redundancy, or as an efficiency exercise of the employer’s functions. Please note there will be a strain cost for members who are made redundant or leave on efficiency grounds and are over 55 so it is important that employers ask the pensions team for a quote.
What do the pensions team need to process a Redundancy/Efficiency retirement?
- Completed leavers form PEN007
- Copy of the notice letter sent to the employee
- P45 (if available) – this should be sent in order for income tax deductions from the pension to be assessed.
When is Early Retirement Strain (Fund Strain) paid?
When a member retires before Normal Pension Age (NPA) with employers consent or if employers choose to waiver the reduction to benefits, there is usually a “fund strain”. This is due to the pension benefits being paid earlier than normal retirement age and as such being in payment to the member for a longer period of time and at a full rate (if reduction is waivered).
These factors impact on the funding of the scheme as the Fund is valued on the basis that the member continues to work and contribute to the scheme until their normal retirement date.
If you have any retirements that have a strain on the fund you will receive an invoice for the strain amount shortly after the members’ retirement. It is strongly advised that if you are considering members for early retirement that you request a quotation (using PEN010 form) from Pension Services.