Retirement
Employees who plan to retire should inform their manager as soon as possible. Notification applies whether the employee:
- is or is not in the relevant pension scheme
- plans to retire on a specific date
- applies for flexible retirement
The employee should inform their line manager in writing of their intended retirement date. Early notice will help us to put in place appropriate succession plans, and to support the employee moving into retirement.
The line manager will meet with the employee to discuss leaving, including:
- the intended leaving date, taking account of the required notice period in the employee's contract
- succession and handover plans
- pension details
- any other relevant details
We will send the employee a written notice of receipt of their retirement resignation. It will include confirmation of the agreed leaving date.
Applying for flexible retirement
To apply for flexible retirement under the Local Government Pension Scheme (LGPS), an employee needs to be:
- of minimum pensionable age which is currently 55
- have a minimum of two years' pensionable service
Retire and return
Employees may retire, claim their pension, and then elect to return to their substantive role. To do this will:
- require manager approval
- depend on service requirements
Employees may return on either full or part-time hours. The pensions website and the intranet (SharePoint) pensions page have application details and guidelines for each pension plan.
Reducing hours or grade
To be eligible for flexible retirement, the employee must agree to an appropriate:
- reduction in their hours of work
- or, lower grade
It is not a requirement of this policy that the employee does both. If either condition applies, flexible retirement is possible.
Hours
Reduction in hours should usually be a minimum of 20 per cent for both full and existing part-time staff. This is the equivalent of reducing by one day per week (7.4 hours) for full-time staff. The reduction can be achieved by:
- fewer hours on some days or every working day - a total reduction of 7.4 hours over a week
- reducing the number of days worked in the week by 20 per cent
Grade
The employee should normally identify a suitable lower-graded post. Appointment to a position is by:
- merit through open recruitment
- internal transfer within their service area (with a business case). For example, where there is no recruitment to the existing post
A suitable lower-graded post can be in their existing service area or elsewhere at the council.
The reduction is usually required to be at least two equivalent grades. The new pay rate will be equal in position on the new grade to the former position in the previous grade. For example, if the employee is currently at the top point of grade 10, they will reduce to the top point of grade 8. If the employee is moving to a different pay scale, there should be a substantial difference.
If the minimum reduction in hours or grades is not met, managers have discretion in exceptional cases. There may be clear benefits to both the employee and us to grant flexible retirement still. In such cases, the manager must provide clear evidence in their business case to support the application. The application would need the support of the relevant Executive Director.
We will consider this where:
- it is in our interests, such as retaining an essential skill
- difficulties are impacting the employee, such as caring responsibilities
Consideration for further promotions of employees who have taken flexible retirement is unusual. There would need to be a strong business benefit in doing so.
Changes in grade or hours resulting from the national agreement will not be part of a flexible retirement proposal.
Special circumstances
We do not redesign existing posts to change the grade to aid flexible retirement. We can consider cases with exceptional circumstances. For example, retaining a particular skill pending a restructure. This may require a formal job evaluation.
Overriding legislation can restrict an employee's pension benefits, for example, the introduction of the proposed exit cap.
We may apply different criteria for reducing pay or grade on an individual basis.
Employees who are not members of the LGPS may make a flexible working application. They can apply to change or reduce working hours as a means of transitioning into retirement.
For more details, read the working flexibly policy.
Where we agree to flexible retirement, the employee must draw all of the benefits that relate to any LGPS membership to 31 March 2008, plus:
- all, none or some of the benefits that relate to LGPS membership from 1 April 2008 to 31 March 2014
- all, none or some of the benefits that relate to LGPS pension built up from 1 April 2014, plus any additional benefits including
- added years
- purchase of additional pension
- additional pension awarded by the employer
- any AVCs, should they choose to receive these at the same time
This policy also applies to LGPS members in relevant schools. For these employees, there is a separate approval process.
We will consider flexible retirement on the merits of each case. We will look at:
- the needs of the service
- any significant detrimental effect on service delivery
- the circumstances of the employee and the wider team
Flexible retirement is a voluntary option. There is no requirement for employees to enter into a flexible retirement arrangement. Managers and employees may wish to consider whether there is a business case as there could be costs to the organisation of an early pension release.
A request to take flexible retirement is a step which requires full consideration.
Please see the process to be followed on the Policy Resources for Managers section of Lincs2Learn.
Employees should first raise the matter informally with their manager.
They will arrange a discussion to enable:
- relevant matters to be considered and addressed at an early stage
- a request for an estimate of the pension benefits
It is essential, in the interests of both parties, that the following are known at an early stage:
- an indication of the pension which the employee may receive
- any costs to the council
- any actuarial reduction which may arise plus
- any discretions which there may be to support any business case
The manager will contact HR to request pension information on behalf of the employee. When received, they will share this with the employee. A further meeting should then take place. If the employee wishes to proceed, they will be required to submit a formal request in writing. The application should include:
- that it is a request for flexible retirement
- whether a previous application has been made and, if so, when
- the change applied (for example, reduced hours, lower grade)
- the date the employee wishes it to become effective
- the effect that the change may have on the council, including how we might accommodate it
- that the employee meets the age and pension requirements
- any benefits which may arise from the implementation of the request
- a signature and date
The manager will consider this request with the employee. They will then process and support it to their head of service (HoS). The HoS will recommend to the assistant director (AD), or equivalent role, to either approve or refuse the request.
The employee will receive any reasons for refusal. Employees may have the decision reviewed by an independent AD.
The same process is applied for those in AD posts or above seeking flexible retirement. Approval processes will be in line with decision-making as set out in the constitution.
Salary
Employees will receive their revised salary in addition to their pension benefits.
Actuarial reduction
Pension benefits will reduce if an employee takes them before the normal retirement age. This follows guidance issued by the Government actuary. It is known as an actuarial reduction.
Employees need to understand what the impact the early drawing of their pension will have. It is the employee's responsibility to make an informed choice. We will support in the provision of information.
Under the actuarial rules, we can waive, in whole or in part, a reduction in benefits which may arise. A decision to do so is solely at our discretion. It would need specific approval by an executive director. This would only take place under exceptional circumstances.
We would be required to pay directly to the pension fund the cost, which arises as a result of this.
Subsequent flexible retirement applications
An employee already on flexible retirement may request further flexible retirement arrangements. We will consider these in the same manner and following the same processes as outlined in this policy.
Any further flexible retirement arrangements, for example, reduction in hours or grade, cannot alter the pension payments from an earlier flexible retirement decision.