How redundancy affects your pension benefits

Updated : Nov 18, 2019 in Articles

How redundancy affects your pension benefits


It may be a challenging time for you if
you’re facing redundancy. You’ll be concerned about the future and
may want to know about the impact on your pension. This video outlines what
you can expect from your pension. It’s separate from any severance scheme or
statutory redundancy payment that you may receive from your employer. Minimum
retirement age for the Local Government Pension Scheme is 55. If you’re made
redundant before this age your benefits will be deferred until you reach your
normal pension age which is the same as your state pension age. This means that
the benefits you’ve built up to the date of redundancy are kept in the scheme and
will be increased each year in line with inflation. As a deferred member you have
the option to claim your benefits early or to apply for early payment on the
grounds of ill health. Alternatively you may be able to transfer your benefits to
your new employers pension scheme. There is additional protection for you if
you’re aged 55 or over and you leave your job due to redundancy or business
efficiency. In this case the benefits that you’ve built up to the date of
leaving or paid to you immediately without any reductions. You cannot
postpone payment of these benefits and your employer meets any cost of paying
your benefits early. This means that on top of any payment made to you by your
employer we will pay you a pension and you can also give up part of your
pension for a tax-free lump sum subject to HMRC limits. Your pension benefits are
payable for life will rise each year in line with
inflation and will still be payable even if you get another job. This short video
has given an overview of redundancy we cannot cover every individual
circumstance but staff at NILGOSC will be happy to discuss how the regulations
apply to you. For more information you can browse the redundancy section of our
website you can also contact us directly on 0345 3197 320 and a member of staff will be happy to answer any
questions that you may have

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