Presentation on theme: "Hampshire Pension Fund “What about my pension?” A presentation to staff Phil Villiers Pensions Communications Officer Pensions Services."— Presentation transcript:
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 overview Leaving 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!
“What if I’m made redundant? I’m over 55” 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
“What if I’m made redundant? I’m over 55” 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: Emailpensions@hants.gov.uk Tel 01962 845588