Redundancy aged over 55

How being made redundant affects how you can draw your LGPS pension.

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This factsheet is for general information. It cannot cover every individual circumstance and does not form any contractual agreement or entitlement to any payment. It should not be treated as a complete and authoritative statement of the law.

Your pension if you're made redundant over age 55

We will pay your LGPS pension without reduction if all of the following apply to you.

  • You are made redundant.
  • You are a current member of the LGPS.
  • You have at least two years in the LGPS.
  • You are aged at least 55 years old.

Once you qualify, your pension starts right away, and this is not optional. If you find a new job after your pension starts, we still pay your pension.

Even though you're taking your pension before your State Pension age, we don't reduce your pension benefits. Your employer pays the cost for releasing the benefit early. 

Additional pension contributions (APCs)

If you paid APCs and you have not reached the end of your contract, we will reduce the extra pension payable. This is because you were paying the entire cost yourself, so there is no one to support the cost of early payment. 

Additional voluntary contributions (AVCs)

If you paid AVCs, you have some choice about how to use that fund. We will send you those details once we know your AVC fund value.  This extra stage can hold things up a little.

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How your pension is calculated

You can get a broad idea of the current value of your benefits on your most recent benefit statement or by running an estimate on My Oxfordshire Pension. 

We will provide more precise figures once we get the following information from your employer:

  • your last day of service
  • details of your pay.

You can find out how your pension is calculated by visiting https://www.lgpsmember.org/your-pension/paying-in/how-your-pension-is-worked-out/

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Taking a lump-sum

When you take your pension benefits, you can choose to swap part of your pension for a lump sum. Your lump sum may also be known as Tax Free Cash, or sometimes a Retirement Grant. 

For every £1 of annual pension you give up you will get a lump sum of £12. You can find out more about tax free cash by visiting https://www.lgpsmember.org/your-pension/planning/taking-a-lump-sum/#how-much-lump-sum

When you are made redundant, we will ask you if you want to swap any of your pension for lump sum. We will let you know:

  • how much pension you have built up, and any automatic lump sum if you joined before 1 April 2008
  • the maximum lump sum you can take
  • the reduced pension you would receive every year if you choose the maximum lump sum.

Once you have chosen what lump sum and pension to take, you cannot change your decision. You cannot elect to swap pension for lump sum once your pension is being paid to you.

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Overview of the pension process for redundancy

Process, actions and timescales
Process steps Actions and timescales
Step 1

Pension Services must receive confirmation of the following from your employer:

  • you are leaving on redundancy 
  • you have an entitlement to a pension
  • your pay for the last year.

Your employer must send us these details before the 19th of the month after you were last paid.
Step 2

We will prepare your pension details. We'll give you this information within 10 days of receiving the payroll information from your employer.

We will tell you about your options. And request personal and payment details from you.
Step 3

If you know how you would like to receive your benefit, you can complete a retirement declaration form. We will not send a quote.

We cannot set up payment until you return your completed retirement declaration form. The form confirms your choice for how you want your pension paid. 
Step 4

We will set up payment of your pension or lump sum.

Your pension is paid monthly, on the last working day of the month. The first monthly payment would catch up on any pension due from the day following your last day of service.

Consumer price index (CPI)

Your pension in payment is reviewed every year in line with CPI.

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If you don't qualify

If you are made redundant under age 55

You cannot receive payment of your pension. You will have what is known as a deferred pension. We will write to you with your options and the value of your pension. You'll get a review statement every year.

If you are made redundant with less than two years in the LGPS

You may be able to have a refund of your contributions. We will write to you to tell you your options.

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