If you dismiss an active member due to redundancy or business efficiency (including by mutual consent), then they are entitled to and must take immediate payment of their pension relating to that employment, if the following conditions are true:

  • the member is aged 55 or over
  • the member has at least two years in the LGPS

The pension will be paid unreduced for early payment.

A pension paid on redundancy grounds is not enhanced to normal pension age. Any decision to make an enhancement to a redundancy pension will incur a cost which will be entirely borne by you, the employer.

Hidden cost of redundancy

You will likely incur a cost for allowing the pension to be paid early.

The hidden cost (sometimes known as the capital cost or the pension strain) is the upfront cost the employer must pay after agreeing to bring a member's pension into payment early.

Learn more about hidden costs.

Process for redundancy retirement

  • to establish the hidden cost associated with the redundancy, complete an HR estimate form and return it to us
  • we will calculate the hidden cost and then inform you of those likely costs and the terms of the repayment
  • make your decision based on the information provided

When you agree to redundancy for someone aged 55 or over, you should complete and return a retirement confirmation form to Pension Services as your formal approval of early pension payment.

Once the member has left:

  • submit the leaver details and CARE details on i-Connect before the 19th of the month following payroll
  • we will calculate retirement benefits within 10 working days of having full information, and inform the member of their payment options

Soon after you have finalised the retirement, we will contact you about:

  • the payment of the retirement's hidden cost
  • the repayment period