If your employee is over 55 and made redundant, or dismissed under grounds of efficiency, they may be eligible to receive their pension unreduced.
Does the employee qualify?
To qualify for redundancy or efficiency retirement, an active member must:
- be over 55 years old.
- have been an active member of the LGPS for at least two years.
- be made redundant or dismissed on efficiency grounds.
Important notes:
- Employers usually incur a cost for redundancies between ages 55 and Normal Pension Age. This cost can be calculated by requesting a ‘Strain on Fund’ estimate via i-Connect.
- If the employee qualifies, their pension must be paid immediately and cannot be deferred.
- Members under 55 who are made redundant or dismissed on efficiency grounds will NOT be eligible to receive their retirement benefits. Their pension will be deferred until retirement age. Record these instances in your regular i-Connect upload.
- Members with less than two years of service (and no other LGPS service) are only entitled to a refund of their contributions. This refund must be administered by Avon Pension Fund.
How to process a redundancy retirement
Requesting an estimate for pension benefits and strain cost calculation
It is important that before processing an employee leaving because of redundancy or efficiency that a pension benefit estimate and the strain costs are obtained.
You will need to calculate an estimate for the ‘Strain on Fund’ costs using i-Connect
If you need the employee’s pension figures for your consultation you will need to apply for a pension estimate. You can apply for an estimate by completing the application form and uploading to the employee’s i-Connect record.
Apply for a redundancy or efficiency retirement estimate
Tell us about an employee leaving because of redundancy or efficiency
You can tell us by completing the online leaver form for redundancy or efficiency and uploading this to the employee’s i-Connect record.
Redundancy or efficiency retirement leaver form
What happens next
- You will receive a confirmation email from the Fund confirming the reason for leaving – if this is correct then no further action will be required.
- Avon Pension Fund will send a pension pack to the employee. This pack includes all the necessary forms to put their pension into payment. The employee needs to complete and return this paperwork to us.
- When the pension has been put into payment you will receive a Strain on Fund invoice – this must be paid within 2 weeks of its issue (if this payment is late interest will be added at the rate of 2% above then the current Bank of England Base Rate).