Shropshire County Pension fund

Taking care of your Local Government Pension in Shropshire

Redundancy or Efficiency Retirement

Volunteering to take early retirement on either redundancy or business efficiency grounds can be a very difficult decision to make, but rest assured your Local Government Pension Scheme (LGPS) benefits will be protected – whatever happens.

Don’t forget, if you are considering applying for Voluntary Redundancy or retiring on business efficiency grounds, you will first need to speak to your employer. They will be able to tell you their administration process and whether or not such a request is likely to be granted.

Over age 55 and have met the 2 years vesting period

If you are aged 55 or over, your main benefits are payable immediately without any early retirement reductions if your employer makes you redundant, or you are retired on the grounds of business efficiency and you have met the 2 years vesting period in the scheme. However, any additional pension paid for by Additional Pension Contributions (APCs) or Shared Cost Additional Pension Contributions (SCAPCs) would be paid at a reduced rate if the retirement occurred before your normal pension age (to take account of the additional pension being paid for longer).

If you were a member of the LGPS before 1 April 2014 the pension you built up before then is based on your final salary when you leave the scheme. Also, if you have bought additional pension by Additional Regular Contributions (ARCs), that additional pension would be paid at a reduced rate if the retirement occurred before your pre 1 April 2014 normal pension age which for most is age 65.  

Under age 55 and have met the 2 years vesting period

If you are made redundant or leave on the grounds of business efficiency and are under the age of 55, you will not be able to retire through redundancy- immediately access your pension benefits. Instead, if you have met the 2 year vesting period in the scheme, you will be entitled to deferred benefits. Your deferred benefits will be increased in line with inflation and you can access them at any age from 55. However, this would be considered voluntary/early retirement and early retirement reductions will be applied.

You also have the option to transfer your deferred benefits to another pension scheme.

Under or over 55 and have not met the 2 year vesting period

If you are a member of the LGPS for less than 2 years and are made redundant or leave on the grounds of business efficiency, you will have the option of a refund or to transfer your benefits to another pension scheme.

However, if you have previous LGPS benefits either with Shropshire County Pension Fund, or another LGPS Fund, you will be granted deferred benefits in place of a refund.

What will my benefits be? 

If you are facing redundancy or leaving your employment due to business efficiency, you can work out what your pension benefits will be through ‘My Pension Online’.

‘My Pension Online’ has an application known as ‘Benefit Projector’. If you are over the age of 55 you can use the ‘Redundancy Retirement’ option to work out what you pension benefits will be, and you can even calculate the potential retirement grant you could take.

If you are under age 55, you can run the ‘Deferred Benefits’ option of the ‘Benefit Projector’ to see what your deferred benefits would be.

Further information

‘My Pension Online’

Calculator (this link will redirect you to the national LGPS member website)