The government are looking to bring in new rules which may affect future retirements from the Local Government Pension Scheme (LGPS). The new rules could affect exit packages for active scheme members who are:
- made redundant or retired on the grounds of business efficiency
- paying into the LGPS
- age 55 or over
- a public sector employee
You may need to choose how your exit payment is made if the changes affect you. This could involve a choice between getting an unreduced pension or a full redundancy payment.
A cap of £95,000 is also being introduced on the value of exit payments made to public sector employees. Exit payments include:
- statutory redundancy payments
- employer severance payments
- shortfall costs your employer pays to us instead of us reducing your pension for early retirement
- other payments your employer may make when you leave employment
We're expecting the new rules to take effect before the end of 2020.
Please talk to your employer if you're due to retire on these grounds.
Further details about public sector exit payments can be found on the LGPS Advisory Board website.