New Starter Guide December 2017 | Page 22

Will my pension be reduced if I voluntarily retire before my Normal Pension Age? If you choose to retire before your Normal Pension Age your benefits will normally be reduced to take account of being paid for longer. Your benefits are initially calculated as detailed under the heading How is my pension worked out? and are then reduced. How much your benefits are reduced by depends on how early you draw them. If you were a member of the LGPS on 30 th September 2006, some or all of your benefits paid early could be protected from the reduction if you have rule of 85 protection. What if I lose my job through redundancy or business efficiency? If you are aged 55 or over you will be entitled to the immediate unreduced payment of your LGPS benefits, provided, 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). 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 st April 2014 Normal Pension Age which, for most, is age 65. What happens if I have to retire early due to ill health? If you have to leave work due to illness you may be able to receive immediate payment of your benefits. To qualify for ill health benefits you have to 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 them, 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 if you are unlikely to be capable of gainful employment within 3 years of leaving. 20 SouthYorkshirePensionsAuthority What if I want to have a gradual move into retirement? This is known as flexible retirement. From age 55, 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 and your employer agrees, you can draw some or all of the pension benefits you have built up - helping you ease into retirement. If you take flexible retirement before your Normal Pension Age your benefits may be reduced to take account of their early payment unless your employer agrees to waive the reduction in whole or in part. If your employer agrees to flexible retirement you can still draw your wages / salary from your job on the reduced hours or grade and continue paying into the LGPS, building up further benefits in the scheme. Flexible retirement is at the discretion of your employer and they must set out their policy on this in a published statement. What if I carry on working after my Normal Pension Age? If you carry on working after your Normal Pension Age you will continue to pay into the LGPS, building up further benefits. When you eventually retire you will receive your pension unless you choose to delay drawing it. You must draw your pension by no later than age 75. Your pension will be paid at an increased rate to reflect the fact that it will be paid for a shorter time. How does my pension keep its value? On retiring on or after age 55 your LGPS pension increases in line with the cost of living every year throughout your retirement. As the cost of living increases, so will your pension. If you are retired on ill health grounds, your pension