Retirement and flexible retirement policy

1.0 Introduction and purpose

1.1 The purpose of this policy is to set out Wycombe District Council's approach to the retirement of employees.

1.2 This policy has been reviewed taking account of legislation introduced by government on 6 April 2011 which saw the removal of the default retirement age which means that employees who reach the age of 65 will no longer be subject to a normal/compulsory retirement and are able to choose at what age they retire, up to age 75.

1.3 Wycombe District Council recognises the contributions of a diverse workforce, including the skills and experience of older employees and believes that employees should, wherever possible, be permitted to continue working for as long as they wish to do so.

2.0 Scope

2.1 This policy applies to all Wycombe District Council employees, whether they are members of the Local Government Pension Scheme (LGPS) or not.

3.0 Principles

3.1 To provide employees with options and flexibility around retirement and by valuing their diverse contributions.

3.2 The council will benefit from flexible retirement options by retaining knowledge and skills.

3.3 Not to discriminate against any individual in the application of this policy and procedure on the protected characteristics of age, disability, gender reassignment, marriage and civil partnership, maternity and pregnancy, race, religion or belief, sex, sexual orientation, or other grounds protected in law (for example, part-time worker status, trade union membership or HIV positive status).

4.0 Roles and responsibilities

4.1 Heads of service will:

Ensure that objective criteria are applied when deciding whether or not to agree a flexible retirement request by taking account of the requirement to balance the needs of the employee with the operational and business needs of the service.

4.2 Managers will:

  1. Ensure employees are aware of the advice and guidance available to them if they are considering retirement. The correct timeline for advice will depend upon the employee's circumstances and when they plan to retire.
  2. Seek advice from HR as early as possible in the process and keep HR informed throughout.

4.3 Human Resources will:

  1. Support managers and employees through the process
  2. Acknowledge an employee's intention to retire
  3. Request estimate of retirement benefits on behalf of an employee who is under 60

4.4 Employees will:

  1. ensure they fully understand the implications of retirement personally, professionally and financially
  1. complete relevant paperwork in a timely manner in order to request the desired retirement option  

5.0 Retirement and flexible retirement

5.1 Individuals can retire (cease work completely) or flexibly retire (continuing to work, though in a reduced role in terms of scale, scope and/or working hours and usually involving a reduction in salary of between 30 per cent and 60 per cent) and draw pension benefits (where available) from age 55 and until to the eve of their 75th birthday. NB: An individual may opt to remain in employment after their pension has matured (that is, after their 75th birthday).

Retiring or flexibly retiring between age 55 and 59

5.2 The council's formal agreement is required for individuals to retire or flexibly retire.

5.3 Where an individual draws their pension benefits between the age of 55 or 59, but they do not satisfy the "85 year rule" (that is service and age in complete years does not total 85) their pension benefits will be permanently *actuarially reduced, to take account of the pension benefits being drawn early. Therefore, the cost of the early payment of pension benefits will fall to the individual by way of reduced pension benefits. Further detail is contained in the Early payment - reduction to benefits section in the toolkit.

5.4 Where an individual draws their pension benefits early and satisfies the "85 year rule" their accrued pension benefits become payable. However, a cost known as a pension strain arises to the council to pay for the early payment of accrued pension benefits. In these circumstances the council will need to take account of both the costs (pension strain) and organisational benefits when considering the request for retirement or flexible retirement.

Retiring or flexibly retiring at age 60 or above

5.5 Individuals can retire from age 60 and above without the formal agreement of the council. However, any request to flexibly retire will require council consent.

5.6 Where an individual aged 60 or over does not meet the "85 year rule" their pension benefits will be permanently actuarially reduced, to take account of the pension benefits being drawn early. Therefore the cost of the early payment of pension benefits will fall to the individual by way of reduced pension benefits.

5.7 Where an individual aged 60 or over meets the "85 year rule" their accrued pension benefits are paid.

*The value of the actuarial reduction and pension strain is dependent on an individuals' age and length of membership of the local government pension scheme

5.8 Retirement or flexible retirement requests will require the authorisation of the appropriate head of service, the Head of HR and, where there are financial implications to the council, the Head of Finance and Commercial.

5.9 The council undertakes to seriously consider such requests and respond positively where there is no financial cost to the council or detrimental impact on the services we provide. Each request will be considered on its merits and will only be agreed if it is in the council's economic and/or operational interest to do so. Any costs arising to the council will normally be recovered within three years.

5.10 The council is unable to provide advice to individuals on how flexible retirement may impact on pension and employees are strongly advised to contact our administering authority, Buckinghamshire County Council pensions team before requesting flexible retirement. See: BCC pensions scheme: members for further information.               

6 Procedure

6.1 Individuals requesting retirement or flexible retirement between the ages of 55 and 59, and individuals over 60 requesting flexible retirement, whether they are in the LGPS or not, will need to submit an Early retirement and flexible request form (model form 1 of the toolkit) to their head of service. Appendix 1 of this policy sets out the process for considering requests.

6.2 Individuals over 60 years of age and retiring from the council's service are required to provide the council with at least their contractual notice period (usually between one and three months).

7 Appeal process

7.1 An employee should appeal within seven calendar days following receipt of the written confirmation of the decision. Where the original decision was made by a head of service the appeal letter should be sent to the Corporate Director. In cases relating to heads of service any appeal should be sent to the Head of HR.

7.2 Within seven calendar days receipt of the appeal letter, a letter should be sent to the employee advising the date that an appeal can take place. Employees should be informed of their right to be accompanied by either a work colleague or trade union representative.

7.3 A decision must be made and communicated in writing to the employee within seven calendar days of the hearing. There is no further right of appeal.

8 Other retirement options

Early retirement: redundancy (for members of the LGPS)

8.1 In the event that a member aged 55 or over is dismissed on the grounds of redundancy, he/she would be entitled to immediate payment of their pension benefits with no reduction.

Early retirement: efficiency (for members of the LGPS)

8.2 Where an employee is aged 55 or over early retirement may be approved in the interests of the efficient exercise of the council's services. In these circumstances the employee is entitled to immediate payment of their pension benefits with no reduction. Further information can be found in the council's LGPS - Discretion within the scheme policy.

Ill health retirement (for members of the LGPS)

8.3 Ill-health retirement may apply when the council, based on an opinion from an independent occupational health practitioner, is satisfied that an employee will be permanently unable to do their own job and that they will have a reduced likelihood of being capable of obtaining gainful employment. 

8.4 All other routes to help employees remain in work must have been fully explored and exhausted. These routes can include redeployment, part-time working, transferring to a post of lesser responsibility or consideration of other workplace adjustments.

8.5 The council recognises that ill-health retirement requires specialist support from Occupational Health and Human Resources in accordance with the Sickness absence and ill health policy and procedure.

9.0 Further information