This section of the website is for members currently contributing to the Scheme.
We understand that retirement can be both exciting and stressful, and we will do everything we can to make the process as simple as possible. The section of the website has been developed to provide you with essential information about the LGPS retirement process.
Please note - The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.
Early Retirement
Normal Pension Age (NPA)
Flexible Retirement
Ill Health Retirement
Redundancy/Business Efficiency
Late Retirement
Trivial Commutation
Early Retirement
You can choose to retire and draw your pension from the scheme at any time from age 55 to 75, provided you have at least 2 years’ service in the scheme. If you choose to take your pension before your Normal Pension Age it will normally be reduced, as it's being paid earlier.
Please note - The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.
We advise that you first use our online portal, mypension, to run retirement quotes. The portal allows you to run unlimited quotes to help you make an informed decision about your retirement date. The quotes will also take into account any early retirement reductions that may apply. You can also use the
lump sum calculator
to see how your pension is affected if you swap some of it for a lump sum.
If you don’t already have an online account, you will first need to register for
mypension
.
• If you have AVCs, contact us to request your fund value and retirement options. You can also use the
maximum AVC lump sum calculator
to estimate the maximum AVC you could take as a lump sum when you take your LGPS pension
• You may also want to approach your HR department and ask if they have any pre-retirement courses you could attend.
• Consider requesting a state pension quote at
Check your State Pension forecast
plus any other pension entitlements you may be due to, this will give you the full picture of your retirement benefits.
Please note - If you contact the Pensions Authority for a retirement quote, we will only provide one retirement quote in a 12-month period; however, you can produce unlimited quotes on our online portal mypension. Please see link above.
Early Retirement Reductions
| Number of Years |
Pension Reduction |
Lump sum reduction
(for membersip to 31 March 2008) |
| 0 |
0% |
0% |
| 1 |
4.9% |
1.7% |
| 2 |
9.3% |
3.3% |
| 3 |
13.5% |
4.9% |
| 4 |
17.4% |
6.5% |
| 5 |
20.9% |
8.1% |
| 6 |
24.3% |
9.6% |
| 7 |
27.4% |
11.1% |
| 8 |
30.3% |
12.6% |
| 9 |
33.0% |
14.1% |
| 10 |
35.6% |
15.5% |
| 11 |
39.5% |
N/A |
| 12 |
41.8% |
N/A |
| 13 |
43.9% |
N/A |
Retirement Process - flowchart
If, after considering all your options, you wish to draw your benefits, here is the retirement process we follow:
01
Contact your employer, informing them that you would like to take your pension – and hand in your notice. You will need to check with your employer to find out how much notice they require. You can also notify us of your intended retirement date.
02
If you pay additional voluntary contributions (AVCs), when we are told you are retiring, we will request details of your AVC options from Scottish Widows, Prudential or Utmost. We will also arrange for the disinvestment of these when you come closer to your retirement date
We can’t pay your retirement benefits until we have received the funds from your AVC provider. This is to avoid potential over payments. To have a better chance of receiving your lump sum on or shortly after your retirement date, we suggest that you stop paying your AVCs two months before your retirement date.
03
Your employer will provide us, the LGPS Administering Authority, with all the information we require to calculate your pension, such as your leaving date and final pay figures.
04
Once we receive this information from your employer, we will check it for accuracy. If we think any of the information is wrong, we will query this with your employer. This may cause delays, however if this is the case, we will notify you by email.
05
Once we have everything we need, we will calculate and issue your retirement letter. You will need to complete your retirement forms, selecting your options, before returning the forms to us with all supporting documents. If you prefer to email your documents, you can contact us for a secure link to return your documents to
customerservices@sypa.org.uk or by post. If you want your pension paid abroad, ask us for an
overseas bank form.
We transfer money from the UK with Western Union money transfer services.
06
Once you have returned your documents, we check what you have provided. If there is anything missing, or a form not fully completed, we will contact you to request what still needs to be returned or completed.
07
Once we have everything we need, we will process your retirement payment, aiming to pay any tax-free lump sum (if applicable) within 7 working days after your retirement date or the date we receive fully completed information from you. Please note that pensions are payable in arrears and paid on the last banking day of each month, unless you have elected for a quarterly, bi-annual, or annual payment. If you retire part way through the month you will receive a part payment at the end of the month, you will then receive a full month’s payment at the end of the following month and subsequent months. You will receive a letter confirming all this information.
08
In addition, you will receive a text message confirming when the lump sum payment has been paid.
Normal Pension Age (NPA)
NPA is simply the age you can retire without a reduction to your benefits. Your NPA is linked to State Pension Age. Check your
State Pension age
Process
Please follow the process for early retirement above.
If you pay additional voluntary contributions (AVCs), and you confirm you are retiring, we will request details of your AVC options from Scottish Widows, Prudential or Utmost. We will also arrange for the disinvestment of these shortly before your retirement date.
We can’t pay your retirement benefits until we have received the funds from your AVC provider. This is to avoid potential over payments. To have a better chance of receiving your lump sum on or shortly after your retirement date, we suggest that you stop paying your AVCs two months before your retirement date.
Flexible Retirement
Flexible retirement is at the discretion of your employer. Each employer will have a policy on flexible retirement, and we recommend that you ask your employer for a copy of their policy.
A gradual move into retirement by flexibly retiring. If your employer agrees and you are age 55 or over, if you reduce your hours or move to a less senior position and provided you have met the 2 years vesting period in the scheme, you can draw some or all the pension benefits you have built up, whilst carrying on working.
No. Your employer needs to consider the cost to the pension scheme of letting you draw your pension early and also the effect that you either reducing your hours or taking a lower paid job will have on the service they provide.
As you would still be working you will remain in the pension scheme and build up further benefits until you fully retire. When that time comes, we will then pay you another pension, but you should note that if your full retirement takes place before normal pension age this pension will be subject to an early retirement reduction.
First have a chat with your line manager or HR representative to find out how much of a reduction in pay or hours your employer’s policy on flexible retirement requires and whether they would consider an application from yourself. If flexible retirement is a possibility your employer should then approach us for a quote. Your employer will automatically be sent details of any early retirement costs that arise due to your flexible retirement to help them decide whether to accept your application, and you will receive a flexible retirement quote.
Process
When we receive approval from your employer for your flexible retirement, we will send out a retirement quotation, which will have all the forms you need to fill out, with a link to the LGPS Retirement Benefits booklet.
Prior to approval, all requests for flexible retirement quotes must come via your employer.
If you pay additional voluntary contributions (AVCs), and you confirm you are retiring, we will request details of your AVC options from Scottish Widows, Prudential or Utmost. We will also arrange for the disinvestment of these shortly before your retirement date.
We can’t pay your retirement benefits until we have received the funds from your AVC provider. This is to avoid potential over payments. To have a better chance of receiving your lump sum on or shortly after your retirement date, we suggest that you stop paying your AVCs two months before your retirement date.
Ill-Health Retirement
If you’re unable work due to illness you may be able to receive immediate payment of your benefits.
To qualify for ill health benefits, you must have met the 2 years vesting period in the scheme and your employer, based on an opinion from an independent occupational health physician appointed by your employer, must be satisfied that you will be permanently unable to do your own job until your Normal Pension Age and that you are not immediately capable of undertaking gainful employment.
Ill health benefits can be paid at any age and are not reduced on account of early payment – in fact, your benefits could be increased to make up for your early retirement. There are graded levels of benefit based on how likely you are to be capable of gainful employment after you leave.
The different levels of benefit are:
- Tier 1: If you are unlikely to be capable of gainful employment before your Normal Pension Age, ill health benefits are based on the pension you have already built up in your pension account at your date of leaving the scheme plus the pension you would have built up, calculated on assumed pensionable pay, until you reached your Normal Pension Age.
- Tier 2: If you are unlikely to be capable of gainful employment within 3 years of leaving, but are likely to be capable of undertaking such employment before your Normal Pension Age, ill health benefits are based on the pension you have already built up in your pension account at your date of leaving the scheme plus 25% of the pension you would have built up calculated on assumed pensionable pay, until you reached your Normal Pension Age.
- Tier 3: If you are likely to be capable of gainful employment within 3 years of leaving, or before your Normal Pension Age if earlier, ill health benefits are based on the pension you have already built up in your pension account at leaving. Payment of these benefits will be stopped after 3 years, or earlier if you are in gainful employment or become capable of such employment, provided you have not reached your Normal Pension Age by then. If the payment is stopped it will normally become payable again from your Normal Pension Age but there are provisions to allow it to be paid earlier. Details would be provided at the time.
Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.
Your employer will make the decision. They are required by the pension scheme regulations to seek the opinion of suitably qualified medical practitioner(s) but at the end of the day they make the decision based on all the factors relevant to your case. Contrary to popular belief, a scheme member cannot apply for ill health retirement, the employer must start the assessment process.
The Department for Work & Pensions works to different rules. Basically, they look at a much shorter timescale because Incapacity Benefit is designed to provide income for the immediate future. Employment and Support Allowance can also be withdrawn if your medical condition improves. The ill health retirement assessment is concerned with permanent incapability to do your job, which in some cases can be quite different.
The doctors are working to national guidelines issued by the Association of Local Authorities Medical Advisors. They are looking for evidence that a member has had all available treatment considered usual for their medical problem, including referral to a specialist for treatment. It is only after this course has been followed that a long-term prognosis can be given and thus a decision on permanent incapacity until Normal Pension Age. Sometimes this is "on a balance of probabilities" basis but certainly GP letters of support that are not backed up by specialist opinion specifically concentrating on the pension schemes criteria will not be sufficient.
If you are building up pension rights in a number of different jobs each job will be assessed individually for ill health retirement. Depending on your condition the tasks you are required to perform could be quite different and your ability to perform them may vary greatly. Therefore, it is entirely possible that you could be granted ill health retirement from one job but not another.
If you are diagnosed with a life-threatening illness with a short life expectancy the procedure for ill health retirement can be accelerated without the need for many of the forms and processes that would usually be required. All that would be required would be confirmation of your illness from your medical specialist. Your employer knows about this and would put this into operation as soon as you informed them.
The Procedure
Explanatory leaflet about the ill health retirement
Process
When we get approval from your employer for your ill health retirement, we will send out a retirement quotation, which will have all the forms you need to fill out, with a link to the LGPS Retirement Benefits booklet.
Prior to approval, all requests for ill health retirement quotes must come via your employer.
Redundancy or Business efficiency
The following Q & A’s are based on a member having at least 2 years membership, which can include previous pension rights transferred into the Fund.
Please note - The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.
If you are aged 55 or over and you are made redundant, or you are retiring with your employer’s consent through business efficiency, your retirement benefits are paid immediately.
If you lose your job because of redundancy or business efficiency, your main benefits are payable immediately without any early retirement reductions.
If your employer makes you redundant, you will be eligible for a statutory redundancy payment from your employer. You will need to contact your employer for details of any statutory redundancy payment.
Your employer can award additional annual pension, to help to compensate for membership that you may lose because you are being retired early, up to £6,500 (less any amount of additional annual pension your employer has already contributed towards or is contributing towards under a shared cost additional pension contributions contract).
Additional pension is granted at the discretion of your employer, so no member has an automatic right to be awarded it.
Because your employer will have to meet all the costs of awarding additional pension they may choose to grant you the maximum pension, a smaller pension, or nothing at all.
All employers must publish policies stating how they intend to exercise their discretion in relation to:
• weekly pay for redundancy purposes
• augmentation of membership/awarding additional pension
If you haven’t seen a copy of your employer’s policy, contact your HR Officer.
Once you have left, your benefits will automatically be deferred and fully inflation-proofed in the LGPS until they come into payment. You can, if you wish, choose to transfer the value of them into another pension scheme or arrangement. An option to transfer must be made at least 12 months before your Normal Pension Age.
Your deferred benefits will usually come into payment when you reach your normal retirement age. You can, however, choose to take your benefits early from:
• age 55; benefits paid before Normal Pension Age will be reduced to take into account early payment.
• any age due to ill-health.
If you are made redundant, and you are aged 55 or over, your retirement benefits must be brought into payment. You do not have the option to defer payment.
Process
When we get approval from your employer for your redundancy/efficiency retirement, we will send out a retirement quotation, which will have all the forms you need to fill out, with a link to the LGPS Retirement Benefits booklet.
Prior to the approval stage, all requests for redundancy/efficiency retirement quotes must come via your employer.
If you pay additional voluntary contributions (AVCs), and you confirm you are retiring, we will request details of your AVC options from Scottish Widows, Prudential or Utmost. We will also arrange for the disinvestment of these when you come closer to your retirement date.
We can’t pay your retirement benefits until we have received the funds from your AVC provider. This is to avoid potential over payments. To have a better chance of receiving your lump sum on or shortly after your retirement date, we suggest that you stop paying your AVCs two months before your retirement date.
Late Retirement
Some people carry on working after their normal pension age. If you decide to do this, you can carry on paying into the LGPS until the day before your 75th birthday. We will then increase your pension because you’ll be drawing it later than normal but you must remember that we have to pay your pension to you by your 75th birthday, but you can carry on working.
Please note: To comply with overriding Tax law, no death grant can be paid in respect of a death after a person’s 75th birthday. Therefore, if you retire at age 75 and pass away within 10 years of retirement, no lump sum death grant would be payable only an eligible dependant pension.
Process
When you or your employer tells us that you are retiring, we will send out a retirement quotation, which will have all the forms you need to fill out, with a link to the LGPS Retirement Benefits booklet.
Because of tax and the rules of the scheme, your pension must be brought into payment before you turn 75.
If you pay additional voluntary contributions (AVCs), and you confirm you are retiring, we will request details of your AVC options from Scottish Widows, Prudential or Utmost. We will also arrange for the disinvestment of these shortly before your retirement date.
We can’t pay your retirement benefits until we have received the funds from your AVC provider. This is to avoid potential over payments. To have a better chance of receiving your lump sum on or shortly after your retirement date, we suggest that you stop paying your AVCs two months before your retirement date.
Q & A’s – All Retirements
So we can process your retirement quickly and accurately, we ask for quite a lot of information, including:
• Asking you to check your personal details
• Which option for retirement you want
• Your banking details (we can no longer pay you using a cheque)
• Details of any other pensions you have (excluding State Pensions, Spouse or Dependant's Pensions).
We also have to make sure you are who you say you are, so we also ask for copies of:
• Your birth certificate
• Your marriage/civil partnership certificate
• Partner's birth certificate (if married, in a civil partnership or in a co-habiting relationship)
• Your decree absolute/final order, if you are divorced/have had your civil partnership dissolved
• Death certificates (if you are a widow/widower/surviving civil partner)
• Your separation order (If separated by a court order)
We do not ask you to send in your original certificates, just photocopies or scanned copies. That way you can keep the originals safe.
We will always try to pay your benefits as soon as possible. We will send you a letter to confirm the date of payment of your lump sum and the payroll date when your pension will start. If there have been any delays your first pension payment will be backdated to your retirement date.
No, you will not have to pay National Insurance contributions on your pension or lump sum.
Trivial Commutation
Taking all your pension benefits as a lump sum
If your LGPS monthly pension is small, you may be able to take all your benefits as a one-off lump sum payment. This is known as a trivial commutation.
What is Trivial Commutation?
A trivial commutation is where your pension benefits are paid as a single payment instead of a monthly pension. Trivial commutations extinguish your rights in the pension scheme and those of any dependants; this means that after a trivial commutation is paid, no further benefits would be due to you or any dependants at any point in the future.
The rules governing whether you can take a trivial commutation are quite complex and depend on whether you want to take a trivial commutation from more than one pension scheme or from the LGPS only.
Trivial commutation from more than one pension scheme
If the total value of your benefits is less than £30,000* and your benefits are in more than one scheme (for example, LGPS and non-LGPS but not including state pension) you may be able to take a trivial commutation payment. Generally, you must be:
• Age 55 or over, or if you have scheme membership before 6 April 1997, age 60 for a female or age 65 for a male; and
• You have not received payment of a previous trivial commutation lump sum. If so, it has been paid within the last 12 months.
• If you have an ongoing pensionable employment, trivial commutation is not an option.
Trivial commutation from the LGPS only
If the total value of your pension benefits in the LGPS is less than £10,000* you may be able to take a one-off payment. To be eligible:
• You must have left the scheme after 31 March 2008.
• You must be age 55 or over, or if you have scheme membership before 6 April 1997, age 60 for a female or age 65 for a male; and
• The value of your LGPS benefits must include any benefits you have in other LGPS funds in England and Wales.
• You have not transferred any benefits out of the LGPS in the last 3 years; and
• If you left the pension scheme before 1 April 2014, you must not have received a transfer into the scheme during the 5 years preceding the date of the commutation payment; and
• You are not a "Controlling Director" of any employer in the LGPS.
It’s important to note that 75% of a trivial commutation lump sum payment is subject to tax.
If you believe you meet the conditions listed and might wish to receive a Trivial Commutation Lump Sum, as an alternative to a monthly pension please contact us at
customerservices@sypa.org.uk
*Please note: The capital value is the value of your pension benefits and not the annual amount of pension payable. To test against the £10,000 or £30,000 limit, pensions being paid are valued at 20 times the annual pension income. For example, a pension of £750 a year would be valued at £15,000 (20 x £750). If you received a tax-free lump sum when the pension commenced, the amount of the lump sum is added to this value. If you started receiving your pension before 6 April 2006, these are normally valued at 25 times the annual pension income as it was on 5 April 2006, and you do not need to add on any previous lump sums.