Retirement

LGPS

Retirement at age 65

Normal retirement age in the Local Government Pension Scheme (LGPS) is 65. Retirement benefits are only payable when you have at least two years' membership in the LGPS or have transferred in other non-Scottish local government pension rights.

Retirement prior to age 60

With the consent of your employer, you can still retire before age 60. From 1 April 2009, the earliest retirement age for Scheme members is age 55. For members who transferred into the new scheme on 1 April 2009, the earliest retirement age is reduced from 55 to 50 until 31 March 2010. When an employer agrees to early retirement there is a cost to the Pension Fund because benefits are being paid prior to normal retirement age. This cost is known as 'Strain on the Fund' and will be passed on to the employer.

Retirement from age 60

You can choose to retire on a voluntary basis from age 60 onwards but your pension and lump sum will be reduced. Transitional protection exists for payment of benefits without a reduction but only for those who were Scheme members before 1 December 2006:

Members born before 1 April 1960 who retire and elect to receive payment of their pension benefits before age 65 and satisfy the "rule of 85" will have protection on any benefits accrued up to 31 March 2020. Benefits accrued after 1 April 2020 will be subject to a reduction. The "rule of 85" is achieved when completed years membership plus age (in complete years) equals 85.

Members born after 1 April 1960 who would have achieved the rule of 85 will have protection on benefits accrued up to 31 March 2008. Benefits accrued after 1 April 2008 will be subject to reduction.

The Voluntary Benefit Projector within Internet Member Self Service calculates benefits from age 60 with reduction. 

Retirement after age 65

If you decide to continue in employment after age 65, your pension will not come into payment until you retire. Benefits accrued up to age 65, and also any benefits accrued from age 65 to date of retirement, will be enhanced in accordance with guidance issued by the Scheme actuary. Pension benefits must come into payment, at the latest, on the day before your 75th birthday.

Flexible Retirement

With your employer's agreement, you may reduce your hours or grade and at the same time begin to draw all of the benefits you have built up. In future, you will be able to choose to draw some or all of your benefits. The earliest age for flexible retirement is 55 but for members who transferred into the new Scheme on 1 April 2009 it remains 50 until 1 April 2010. If you take flexible retirement before age 65 your benefits may be reduced for early payment.

Ill Health Retirement

If you have at least two years' membership, and you become permanently unfit to carry out the duties of your employment due to ill health, you will be eligible for tiered ill health benefits. Your employer will decide the level of ill health benefit you receive after consultation with an approved medical advisor.

Tier 1
Where there is no reasonable prospect of paid employment before age 65, ill health benefits will be paid to you immediately based on what your membership would have been had you worked to age 65.

Tier 2
Where there is a reasonable prospect of paid employment before age 65, you will receive pension benefits paid to you immediately based on your actual membership to date of retiral plus enhancement of 25% of your potential membership from date of retirement to age 65.

Tier 3
Third tier benefits are payable by your employer, not the Pension Fund. This would arise where an employer terminates a member's employment on the grounds of ill health but does not consider that the member is permanently unfit of carrying out the duties of their current employment.

Redundancy or Efficiency Retirement

To be eligible for immediate payment of pension benefits where a member leaves employment on the grounds of redundancy or business efficiency, they must have attained the age of 55. However, for a Scheme member who was a member on 31/03/2009 and retires before 31/03/2010, they must have attained the age of 50. Those Scheme members who were members on 05/04/2006 retain the earliest retirement age of 50.

The Redundancy Benefit Projector within Internet Member Self Service calculates benefits without enhancement from your employer.