Leaving employment | Oxfordshire County Council

Leaving employment

What employers need to do when an employee leaves, including for retirement.

The LGPS 2014 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 after 31 March 2014, if a member has 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

If the reason for leaving or terminating the employment is:

 look at the relevant toolkit pages   to make sure you send us the correct information to enable pension calculations.

If the member is leaving employment after age 55 but before their normal pension age (their state pension age (SPA) but 65 if the SPA is earlier), and none  of the reasons mentioned above apply, the member can decide whether and when to draw  their pension.

Everyone in this group is treated as a general leaver, with an entitlement to a deferred benefit.

The member’s decision and request for payment would move the work into a higher priority in Pension Services.

Notice

The member must give Pension Services at least three months’ notice, of their pension payment date using the  claim form (docx format, 268Kb).

As an employer if you are discussing retirement options with your employee please ensure you alert them to their need to request payment.

The pension from April 2014 is Career Average Revalued Earnings (CARE) scheme, and  calculation can only begin after all salary payments have been completed and reported to Pension Services, usually at least midway through the month after their final salary payment.

Leaving employment at 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 Pension Services to have the employer to complete Retirement confirmation form   
  • for member to know the timescales and information required before payment is possible .

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.

Reminders for all employers

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 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

Last reviewed
12 January 2017
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