Hampshire Pension Fund “What about my pension?” A presentation to staff

Hampshire Pension Fund

“What about my pension?”

A presentation to staff

Phil Villiers

Pensions Communications Officer

Pensions Services

‘Warning’• This presentation reflects the structure of the Local

Government Pension Scheme (LGPS) as at November

2010.

• The Government have announced a review of public

sector pension provision, which could lead to changes to

the LGPS in the future.

• At this stage we are unable to advise what changes, if

any, will be made and when they will take effect.

• We will advise scheme members as soon as any

changes are announced.

Summary• Scheme overview

– Final salary – currently!

– Leaving service before age 65

• “What if I’m made redundant? I’m under 55”– Deferred benefits

• “What if I’m made redundant? I’m over 55”– Immediate pension benefits

• Remaining in service– Flexible retirement

– Re-deployment

– Reducing hours

• Where can I get more information?

Scheme overview

Final salary (currently!)

• Pension/tax free lump sum

– Pre-April 2008 service:

• 80ths pension + 3/80ths tax-free lump sum

– Post-April 2008 service:

• 60ths pension

• No additional tax-free lump sum

• Option to give up pension for tax-free lump sum

• Normal retirement age 65

• See our website for more details– www.hants.gov.uk/finance/pensions

Scheme overviewLeaving service before age 65• ‘Accrued’ benefits

– benefits built up at date of leaving (called ‘deferred benefits’) • based on completed membership and final pay

• Can retire from age 55…but– can only retire below 60 with employer consent– accrued benefits % reduced for early payment,

• if 85-year rule not satisfied

• ‘85-year rule’– applies to those who

• joined scheme before 1 October 2006 and • whose age plus ‘service’ in completed years = 85

– full protection to 31 March 2016 if born before 1 April 1956 – ‘partial’ protection if born after 31 March 1956

• See our website for more details

“What if I’m made redundant? I’m under 55”

Deferred benefits – no special terms• leaving benefits built-up in scheme, based on

– final pay and

– completed membership

– at date of leaving

• payable from age 65

• ‘index-linked’ from date of leaving to retirement

• can be paid from age 60– but will be reduced if 85-year rule not satisfied

• can be transferred to another scheme before retirement– eg new employer’s scheme, personal pension

• See our website for more details under past member

“What if I’m made redundant? I’m over 55”

Retirement on enhanced benefits

• Immediate payment of benefits built-up in scheme

– pension plus tax-free lump sum

– option to give up some pension for more tax-free lump sum

• Based on

– final pay and completed membership at date of leaving

• No reduction for early payment

• You cannot take deferred benefits instead – if you’re over 55 you must draw immediate benefits!


Retirement on enhanced benefits• Additional contributions

– cease at date of leaving– Added years

• Option available to pay remaining contributions in contract

– ARCs• No option to pay remaining contributions in contract• Reduced benefit paid, based on contributions paid to date of leaving

– AVCs• Fund used to increase pension and/or tax-free lump sum

• Redundancy payment– Option to use non-statutory element of redundancy payment to

increase pension– ‘Ready reckoner’ available


Retirement on enhanced benefits• Pension in payment

– subject to income tax, not N.I.

– pensions increases• annual review in April

• based on annual increase in Consumer Prices Index (‘CPI’) at previous September

– may be ‘abated’ if you are subsequently employed by an employer that participates in the LGPS.

• For more details see our website

• ‘Got a question A-Z’

• (R)e-employment

Remaining in service – flexible retirement

• Available if over 55

• With employer consent,

– drawing benefits early and

– continuing working on reduced hours/lower grade*

– *level of reduction included in employer discretionary policy

• Retirement benefits payable:

– as if leaving service voluntarily and retiring with employer consent,

– so reduced for early payment, unless 85-year rule applies

• ‘Abatement rule’ does NOT apply on flexible retirement

• Can continue paying into LGPS to build up additional benefit

Remaining in service -re-deployment

Change job:

• Existing job

– deferred benefit at date job ceases

• New job

– re-join scheme for future service

• So two separate membership records

– can join up if you apply within 12 months of re-joining

Remaining in service -re-deployment

Remain in same job with pay freeze or reduction:• Remain in current membership:

– On leaving service, alternative final pay definitions may apply:• Best of the last 3 years

• Average of best 3 consecutive years in the last 10

• If employer allows, defer existing membership:– cease existing membership and defer benefits

– re-join scheme for future service.• May not be best course of action – several factors to be considered

• For more details see our website:– Got a question A-Z

– (R)eduction in pay

Remaining in service – reducing working hours

Pension benefits are linked to

• ‘Whole-time equivalent’ membership and

• ‘Whole-time equivalent’ final pay

So if you reduce your working hours

• your completed period of membership is not reduced

• your future ‘part-time’ membership will be converted to a ‘whole-time equivalent’ period

• at retirement, all your benefits are linked to your ‘whole-time equivalent’ final pay

• For more details see our website:– Got a question A-Z

– (P)art time working/membership

Where can I get more information?

• ‘Any questions?’

• Employee guide

• Website: www.hants.gov.uk/finance/pensions

• Pensions Services:

• Email [email protected]

• Tel 01962 845588

Hampshire Pension Fund “What about my pension?” A presentation to staff

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