There are four ways of retiring from the Local Government Pension Scheme (LGPS).
If you have been a member of the Local Government Pension Scheme (LGPS) for at least 2 years or have transferred previous pension rights into the scheme, you can choose to retire with payment of your pension benefits from age 55 (this will increase to age 57 from 6 April 2028). To take Voluntary Retirement you have to leave employment.
However, if you retire before your Normal Pension Age (NPA), your benefits will be reduced to take account of the early payment.
The reduction is calculated using the factors and guidance issued by the Government Actuary’s Department (GAD). Take a look at these Early Retirement Factors , to give you a guideline of the percentage of reductions. If the number of years is not exact, the reduction percentages are calculated between the two ages.
If you have been a member of the Local Government Pension Scheme (LGPS) for at least 2 years or have transferred previous pension rights into the scheme, you could apply for Flexible Retirement.
To apply for Flexible Retirement you will need to be aged 55 (changing to 57 from 6 April 2028) or over, and meet the eligibility criteria of your Employer’s Flexible Retirement policy. If successful you would be able to carry on working with reduced hours or move to a position with less responsibility. You could also continue to pay into the LGPS under your new contract of employment, building up further benefits in the scheme.
If you lose your job because of redundancy or business efficiency, and you are aged 55 or over and meet the 2 year vesting period, your main benefits are payable immediately without any early retirement reductions. However, any additional pension paid for by Additional Pension Contributions (APCs), Additional Regular Contributions (ARCs) or Shared Cost Additional Pension Contributions 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 have been a member of the Local Government Pension Scheme (LGPS) for at least 2 years or if you have transferred previous pension rights into the scheme, and you are too ill to carry on working, you may be entitled to the immediate payment of your pension benefits. These benefits can be paid with no reduction for early payment, and in some cases you pension could be enhanced.
An Independent Registered Medical Practioner (IRMP).PDF appointed by your Employer will consider your case and if they certify that you are:
- permanently incapable of undertaking the duties of your employment, and
- not immediately capable of gainful employment again before your Normal Pension Age – gainful employment means paid employment of not less than 30 hours per week for a period not less than 12 months
you could be awarded a pension without reduction for early payment, and in some cases your pension could be enhanced as if you had stayed in the Scheme until normal retirement age.
If you need more detailed information on the 3 Tier Ill Health benefits, please contact us.
The ill health retirement process is governed by your Employer.
When you retire you will have the option to exchange some of your pension to receive tax free cash (subject to HMRC limits). We will send you details of the maximum lump sum payable after your employer has confirmed your retirement date and salary details.
Your pension is payable for your lifetime, and will increase each year in line with the Consumer Price Index (CPI).
You have the flexibility to retire and take your benefits from age 55 (changing to age 57 from 6 April 2028) to 75. However, if you qualify for ill health benefits these can be paid at any age.
Your Normal Pension Age (NPA), within the Local Government Pension Scheme (LGPS) is linked to your State Pension Age (SPA). So if there are any changes to your State Pension Age, it will change your LGPS Normal Pension Age.
To qualify for retirement benefits within the Local Government Pension Scheme, you must have been a member of the scheme for at least 2 years or transferred in previous pension benefits into the scheme.
If you joined the LGPS before 1 October 2006 and retire voluntarily before your normal retirement age, part of your pension may be protected under the 85 Year Rule protection . Please contact us if you would like further information.
If your pension benefits are paid early due to Redundancy or Business Efficiency process, there will be no reduction for early payment.
Find details on state benefits and pension, and how to get a state pension forecast.
The Pension Advisory Service
Find out all you need to know about pensions.
The Local Government Pension Scheme
Find out more about your pension scheme and use online tools to estimate your pension.
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