The LGPS brings in the personalised retirement age. Although the point at which a pension is paid without reduction or increase will be the member’s own state pension age, there is greater flexibility for the member when they can draw their pension.

For leavers having at least two years in the LGPS they will have a pension entitlement, however they will not necessarily able to have an immediate payment.

Reasons for leaving

Leaving employment at and after normal pension age

This is the member’s State Pension Age but no earlier than 65. Members are entitled to an immediate pension, due from the day following their last day of service unless the member requests to defer payment.

As pension is due immediately, it is helpful for members to know the timescales and information required before payment is possible.

When terminating the employment due to:

• flexible retirement from age 55
• permanent ill health retirement regardless of age
• redundancy or efficiency reasons from age 55

Follow guidance on these relevant toolkit pages to make sure you supply the correct information, including the leaver information on the MARS return to enable pension calculations.

Leaving employment after age 55

With at least two years in the scheme but before normal pension age and none of the reasons mentioned above apply, Supply full leaver details on the MARS return and Pension Services will advise members of their options.

The member can choose when to draw their pension however must give three month’s notice of that intention to Pension Services.

Under age 55

With at least two years in the scheme – there is an entitlement for a deferred pension - calculated but not due for an immediate payment. Supply full leaver details on the MARS return and Pension Services will advise members of their options.

Any age having less than two years in the scheme

Supply full leaver details on the MARS return and Pension Services will advise members of their options.

The ‘Leaver Tab on the MARS return’ must be completed for all leavers.

Leaving due to transfer of the service

TUPE; end of contractual outsourcing; amalgamations etc.

Employers must contact Pension Services before embarking on the process to fully assess the costs and liabilities.  Again as the service contracts draw to a close you will need reports and actuarial information. The legal procedures to protect members pensions are not to be ignored.

Required action for all leavers

Details for all leavers, whether or not entitled to an immediate pension, must be supplied on the leaver tab on the MARS return.

You must complete the leaver section on the MARS return and the CARE pay details for all leavers.

Pension payments will be delayed if the monthly MARS, with the full leaver, ‘final pay’ and CARE pay details are not supplied.

Pension Services cannot assess benefits or advise the member of their options on leaving the scheme, unless employer has supplied confirmation of leaving, reason for leaving and full pay details.

Remember to alert Pension Services to leavers who had previously opted out of the LGPS but who are not active members at their leaving employment date.

Contact Pension Services if you have any concerns on any of these matters. Advise your employees about the possible timescale involved before payment.

Indication of timescales for a normal retirement

The following can only be a broad guide to the information exchange between the employer, Pension Services and the member leading to the pension payment, because everyone is different and individual.

Step 1: Pension Services receives either retirement confirmation from employer or a member’s ‘Early payment request form’(remember the three months' notice).

Step 2: Retirement confirmation and pension due dates noted and expected work noted in the Pension Services work list, high priority.

Step 3: Within 10 days of  receiving all leavers pay and ‘final pay’ details, from the employers monthly data submission MARS (due every month before the 19th of the month after payment) . Pension Services will send  the member a provisional retirement declaration letter, to show  the  options available. The letter will allow the member to:

• decide when they will receive the pension
• decide the amount of tax free lump sum and pension
• know how to use any AVC fund held with the Prudential, if applicable
• supply all the personal details to ensure Pension Services hold a full pension record, and
• ensure tax and pension savings details held and acted on.

Step 4: Payment date will depend on members response to the provisional options.