EARLY RETIREMENT PROVISIONS
The purpose of the
guidelines
To provide guidance on the Council’s provisions
for retirement before normal retirement age
As a Lewisham
manager you are
expected to
Ensure that the Council’s procedures relating to
sickness absence and management of change
are applied fairly and consistently.
Consider applications for early retirement under
the 85 year rule and flexible retirement. Each
case to be considered on its merits, taking into
account service delivery needs and the potential
costs and benefits to the Council.
Ensure that applications are submitted to the
Corporate Panel for approval as appropriate.
Maintain service delivery.
The guidelines will help
you
To understand the benefits available to
employees who leave the Council’s service on
early retirement and ensure that cases are
processed in accordance with Council
requirements.
Directorate HR Sections will provide advice and
support on reorganisations/restructurings and on
individual cases. The HR manager will obtain
estimates of benefits from the Pensions Team.
Click here for guidance on other related
provisions: sickness absence procedure/tool kit;
management of change guidance.
You can get further
support
Last updated January 07
EARLY RETIREMENT PROVISIONS
CONTENTS
Introduction
Retirement for employees who contribute to the Teachers Pension
Scheme
Retirement for employees who contribute to the Local Government
Pension Scheme
Early Retirement before age 60 under the ’85 year rule’
Early Retirement on grounds of ill-health retirement
For all employees apart from teachers
Teachers
Early Retirement on grounds of Efficiency of the Service
Early Retirement on grounds of Redundancy
Considering early retirement
School-based employees
Corporate Retirement Panel
Flexible Retirement
Flexible Retirement - Key Facts
Implications for Employment Conditions
How to Apply for Flexible Retirement
Stage 1 - Application
Stage 2 – Approval of Corporate Retirement Panel
Stage 3 – Implementation of new contract and payment of pension
benefits.
Financial implications of early retirements
Benefits payable to employees who leave the service on grounds of
redundancy
Employees aged 50 or over with at least 3 months pensionable
service
Employees aged 50 with less than 3 months pensionable service
Employees aged under 50 (pensionable and non pensionable)
Employees who leave the service on grounds of efficiency of the
service
Teachers
Employees aged 50 or over, with at least 2 years service, who do
not contribute to the Pension Scheme
Ill-health retirement
Re-employment:
following early retirement efficiency/redundancy
Ill-health
Implications for pensions
Additional charge to directorates for early retirements on grounds of
efficiency of the service, redundancy or flexible retirement
Compensation Scheme – Table of payments
Application Form for Flexible Retirement
Application Form for submission to the Corporate Retirement Panel for
approval of early retirements.
Introduction
The Council's normal retirement age for both men and women is age 65.
Employees may request to continue to work beyond age 65 up to one month
before their 75th birthday. Applications to work beyond age 65 are considered
on their individual merits by the Executive Director on an annual basis subject
to satisfactory performance and service delivery needs.
Early Retirement
Early retirement may however take place in the following circumstances:
Employees who contribute to the Teachers Pension Scheme
Teachers who joined the Teachers Pensions Scheme before 1/1/07, may
retire at age 60 without any reduction in pension benefits. Teachers who join
the scheme on or after 1/1/07 have a normal retirement age of 65 and will
have their benefits reduced if they retire voluntarily before that age.
Employees who contribute to the Local Government Pension Scheme
Employees who contribute to the Local Government Pension Scheme may
retire at age 60 but if they have less than 25 years pensionable service their
pension benefits will be reduced accordingly.
Early Retirement before age 60 under the ’85 year rule’
Employees who were contributors to the Local Government Pension Scheme
as at 30 September 2006 may apply to retire before age 60 without reduction
in pension benefits if their age plus their pensionable service equals 85 years.
For example an employee aged 55 who has 31 years pensionable service
could apply for early retirement under this provision (age 55 + 31 = 86 years).
Applications for early retirement under the 85 year rule are considered on
their individual merits by the Corporate Retirement Panel. Your directorate
HR Manager will be able to provide further information on this.
This provision will be subject to further changes from 1 April 2008.
Employees wishing to be considered for early retirement under the ’85 year
rule’ after this date should seek clarification of their personal position from the
Pensions Team.
Ill-health retirement
For all employees apart from teachers
Ill-health retirement will only be considered as a last resort where the
Council's Occupational Health Physician (OHP) has certified the employee to
be permanently unfit for further employment. There may be other options
available, without resorting to ill-health retirement, such as working reduced
hours, medical redeployment, re-designing job content, or where appropriate
implementing the capability guidelines. The OHP will advise managers on the
appropriate course of action in each case. Managers should also be aware of
the financial implications of ill-health retirement.
Click here for information on the procedure to be followed for ill-health
retirement.
Contact the Pensions Group, Resources Directorate for further advice on
pensions benefits.
Teachers
In the case of teachers, the Teachers Pension Agency (TPA) makes the
decision on ill-health retirement, on the basis of the available medical
evidence.
Contact the HR Manager, Children & Young People's Directorate for
further advice.
Efficiency of the Service
Early retirement in the interests of the efficiency of the service may be granted
to employees, aged 50 or over who are contributors to the pension fund.
The Council is committed to the continued employment and development of
older employees. Early retirement could result in the Council losing valuable
experience, skills and knowledge. It should therefore only be considered in
circumstances where the employee's skills and abilities no longer meet the
needs of the service.
Early retirement must be management led and should not be perceived by
employees as either an entitlement or a reward for long service.
The cost of early retirement on efficiency grounds is significant for both the
budget holder and the Pension Fund. Such costs must also be taken into
account in deciding whether to progress the retirement - see Financial
Implications for further information on pension costs.
If having considered all the implications managers wish to process an early
retirement application then the case should be referred to the Corporate
Retirement Panel for consideration/approval. No further action should be
taken until the Panel's decision has been received. The Corporate Retirement
Panel's decision is final and there is no right of appeal.
Contact your directorate HR manager for further advice.
Redundancy
This is only applicable to employees whose jobs have been deleted and there
is no alternative employment available within the service. Before deleting a
post it is essential that managers fully consider all possible alternatives
including:
- savings through natural wastage
- reviewing the use of temporary staff, consultants etc
- stopping or restricting overtime
- changing working patterns/hours
- reviewing employment terms
- re-training and re-deployment.
Again there are significant financial costs involved which must be taken into
account when considering reorganisations or restructurings. It is therefore
imperative that managers seek advice from their personnel managers before
embarking on any reorganisation or restructuring. The approval of the
Corporate Retirement Panel must be sought on all
reorganisations/restructurings proposals which could result in redundancies.
Directorate HR Managers will also be able to advise on the process to be
followed in redundancy cases and will be able to arrange for estimates of
benefits and costs to be provided. See Financial Implications for further
advice on the financial implications.
Considering early retirement
Retirement before normal retirement age places a financial burden on both
the Pension Fund and the Council as a whole. It is therefore imperative that
managers ensure that the early retirement provisions are applied properly and
in appropriate circumstances.
Early retirement should not be perceived by employees as either an
entitlement or a reward for long service. It should not be used by management
as an alternative to taking appropriate action to deal with poor performance,
discipline or health problems which should properly be the subject of different
procedures.
In determining early retirements/redundancies the following points should be
taken into account:
all early retirements should be considered in the light of service delivery
needs and the Council's overall aims and objectives.
the capacity of the employee to make a continuing contribution to the work
of the Council.
whether the directorates service/financial objectives can more appropriately
be achieved by means other than premature retirement e.g. in the case of a
redundancy to achieve financial savings, can the savings be achieved by
means other than deleting posts?
the funding of the early retirement, short and long term, and the effect of the
premature retirement on the directorates budget.
the efficiency gain to the directorate, after taking into account the cost of the
premature retirement itself.
in the case of a potential retirement on efficiency grounds, or implementation
of the 85 year rule, the prospects of finding an adequate replacement bearing
in mind the current position of the recruitment market and the particular
location and discipline.
how the employee's retirement might affect the employment profile of the
directorate including the age structure.
Directorate HR managers will also be able to provide further advice on the
application of the early retirement provisions including the provision of
estimates of benefits and financial costs.
School-based employees
Under Local Management of Schools (LMS) the individual School's Governing
Body is responsible for considering early retirements while the costs are
borne by the Children and Young People Directorate. However, the Governing
Body is required to consult with the Children and Young People
Directorate/Corporate Retirement Panel on all early retirements and the LEA
has the power to deduct the cost of the premature retirement from the schools
budget where it does not agree with the Governing Body's decision.
Therefore should a School's Governing Body decide to proceed with an early
retirement outside Council policy then all the subsequent costs will be
charged to the individual school's budget.
Further information and advice can be obtained from Children & Young
People's Directorate HR section.
Corporate Retirement Panel
In order to monitor costs and maintain a consistent approach across the
Council all applications for early retirement (apart from ill-health) must be
submitted to the Corporate Retirement Panel for approval. It is therefore
essential that no action is taken to implement an employee's early retirement
until formal approval has been received. Contact your directorate HR
manager for further information.
Directorate HR managers are responsible for processing early retirement
and redundancy cases and for the provision of monitoring information to
corporate Personnel and Development.
Flexible Retirement
The Council’s flexible retirement scheme comes into effect from 1 April 2007.
The Council values the knowledge, skills and experience of all its employees
and recognises the benefits that flexible retirement may have for both the
employees concerned and the Council as a whole.
There is no right to flexible retirement and each application will be considered
on its individual merits in light of service delivery needs, the benefits to the
Council of the retirement and the overall cost to the pension fund.
Employees who are granted flexible retirement will be able to receive
immediate payment of their pension benefits whilst continuing to work for the
Council on reduced hours and/or in a less senior position. Retaining
employees in this way will allow the transfer of skills and experience to other
workers within the section. It may also enable employees who wish to
relinquish their current level of responsibility to do so without having to leave
the Council’s service.
The Flexible Retirement provisions will be subject to review in light of any
further changes to the Pension Scheme arrangements/Tax rules.
Flexible Retirement - Key Facts
Flexible retirement may be granted to employees over the age of 50, who are
members of the Local Government or Teachers Pension Schemes.
In order to qualify for flexible retirement employees will be required to reduce
their pay by at least 40%. This will normally be achieved by a reduction in
working hours to say 2 or 3 days a week. However it could also be achieved
by moving to a lower graded post if a suitable vacancy exists within the
employee’s specific service area.
The pension benefits payable on flexible retirement will be based on the
employees actual service at the implementation date. The benefits will be
reduced if the employee does not meet the 85 year rule (service + age = 85
years) and may be reduced in respect of service after 31 March 2008,
depending on the age, service and protected rights applicable to the individual
concerned. The Pensions Team will be able to provide advice on pension
benefits.
Employees who are granted flexible retirement may rejoin the pension
scheme and build up further pension benefits based on their reduced
hours/salary. This means that when the employee ceases to work altogether
they will start to receive a second pension based on their subsequent period
of service.
Implications for Employment Conditions
Employees will be required to sign new contracts of employment to reflect the
agreed reduction in hours/grade and any revised duties or working
arrangements.
The new working arrangements will be fixed for a minimum period of 2 years
which will mean that, apart from the general pay award and incremental
progression (if appropriate), no additional payments can be made to the
employee. This means that no payment will be paid for any additional hours
worked (including overtime) or additional duties undertaken (honoraria/acting
up). Any additional hours worked by the employee by agreement with
management would be taken as compensatory time off in lieu (TOIL).
Continuity of service will be preserved for entitlement to annual leave, sick
leave etc. but will be calculated on the reduced working hours/pay as
appropriate.
Should the employee apply for another post within the Council then the 40%
reduction in working hours/pay would be required to be maintained.
If at the end of the 2 year period, a change in the employee’s working
hours/grade is desired then prior agreement to the change must be obtained
from the Corporate Retirement Panel.
Should the employee wish to retire from the Council’s service completely he/
she will be required to give the Council three months notice in writing.
The Council’s normal retirement age is 65. However subject to satisfactory
performance and service delivery needs, employees may apply to continue
working beyond age 65 up to one month before their 75th birthday.
The Council’s other employment procedures and practices will continue to
apply as normal.
How to Apply for Flexible Retirement
Stage 1
An employee who wishes to be considered for flexible retirement must
complete the Application for Flexible Retirement form and submit it to their
team manager (or section head/Head Teacher) by no later than 3 months
before the requested implementation date. This will allow sufficient time for
the application to be fully considered and, if approved, for contractual changes
to be made and pensions implemented.
The appropriate HR section should be asked to obtain an estimate of the
pension benefits from the Pension Team for the employee and management.
The manager/Head Teacher (or Chair of Governors as appropriate) should
meet with the employee to discuss the application and consider the service
delivery implications. The employee may be accompanied at the meeting by a
trade union representative or work colleague.
In considering the request, the manager/Head Teacher (or Chair of Governors
as appropriate) must be satisfied that:
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
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There are clear benefits to the Council from the flexible retirement
There is no detrimental effect on service delivery/budgets.
The arrangement proposed is fair and equitable to other team
members
If appropriate, that there are suitable job(s) available within the service
area at a lower grade.
If the manager/Head Teacher (or Chair of Governors as appropriate) is able to
support the application then the completed form should be submitted to the
relevant Head of Service (or Chair of Governors as appropriate) for
endorsement and then forwarded to the directorate HR manager who will
arrange for the application to be submitted to the Corporate Retirement Panel.
The decision of the Corporate Retirement Panel is final and no action should
be taken to progress the flexible retirement until the Panel’s approval has
been received.
If the manager/Head Teacher (or Chair of Governors) is unable to support the
application then the employee should be informed accordingly with the
reasons. The employee will have to the right to have his/her case to be
reviewed by the Corporate Retirement Panel. This will be a paper review of
the documentation, including the employee’s submission and the
manager’s/head of service comments. In this case the completed application
form, with the comments of the manager/Head Teacher/Head of Service(or
Chair of Governors if appropriate) should be forwarded to the directorate HR
manager who will arrange for the application to be submitted to the Corporate
Retirement Panel. The employee may provide the Panel with additional
written information if he/she wishes.
Stage 2 -
Corporate Retirement Panel
The completed application form should be submitted to the Corporate
Retirement Panel for determination. The Panel will ensure consistency of
approach across the Council. The Panel’s decision is final and there is no
right of appeal.
Stage 3 - Implementation
If the flexible retirement is approved by the Panel then the directorate HR
section will arrange for the RPAU/Schools Team to prepare a new contract of
employment to be issued and signed by the employee.
For members of the Local Government Pension Scheme, the Pensions Team
will write to the employee about the pension arrangements and seek
confirmation from the employee of their wish to elect to draw their pension
benefits. The flexible retirement will not be implemented until all the
necessary documents have been completed by the employee and returned to
the Council i.e. contract of employment, pensions election form.
For members of the Teachers Pension Scheme, the payment of the pension
benefits will be made by the Teachers Pension Agency (TPA).
The application of the flexible retirement scheme will be monitored by the
Pensions/Payroll Team and the Corporate Retirement Panel on a regular
basis.
Re-employment
There are restrictions on the re-employment of employees who have
taken early retirement. See re-employment section for further advice or
contact your directorate HR manager.
Financial implications of early retirements
All retirements before normal retirement age may have a financial impact on
directorate budgets, the Pension Fund and ultimately the Council. It is
therefore imperative that managers ensure that the early retirement provisions
are applied properly and in appropriate circumstances.
Managers and budget holders should be fully aware of the immediate and
long term financial costs of early retirements before making decisions on
individual cases. The following information is therefore intended to assist
managers and budget holders in making decisions regarding early retirements
in the light of service needs and financial costs.
Contact your directorate HR manager for further advice and/or for
detailed estimates and costs in respect of individual employees
Benefits payable to employees who leave the service on grounds of
redundancy
Employees aged 50 or over with at least three months pensionable
service
Immediate payment of monthly pension and lump sum retirement grant
based on actual service and pensionable remuneration over the last year,
plus lump sum compensation payment based on age and length of service as
set out in the Compensation for Redundancy - Payments. The compensation
payment includes the employee’s entitlement to statutory redundancy pay.
Such employees will be given the option to waive their lump sum
compensation in excess of the statutory redundancy payment in return for
additional pensionable service of equivalent value (subject to the limitations of
the pension scheme regulations) in order to increase their pension benefits.
Teachers
Under the teachers pension scheme regulations, employees cannot receive
the immediate payment of their pension benefits AND the additional lump sum
compensation payment outlined above although the statutory redundancy
payment will still be paid. In these circumstances, therefore, teachers will
have the choice between immediate pension benefits or additional lump sum
compensation with preserved benefits (payable at 60)
If the teacher chooses to receive immediate benefits, the Council will top up
these benefits with an award of additional service that is actuarially equivalent
in value to the lump sum compensation that they would have received but for
this restriction.
Click here for a table setting out an employee’s entitlement to statutory
redundancy pay.
The Pension Team will provide advice to teachers facing redundancy
who are affected by this restriction.
Example:
An employee, aged 55, with 12 years continuous local government service
and 16 years pensionable service and earning £20,000 a year is made
redundant. They are entitled to a total of 45 weeks pay (£17,307) as
compensation for redundancy – this includes the statutory redundancy
payment of 18 weeks pay (£6,923).
They become entitled to the immediate payment of their pension benefits
based on 16 years membership. This would amount to a lump sum retirement
grant of £12,000 plus a pension of £4,000 a year.
However, if they prefer they could waive the additional lump sum
compensation and just take the statutory redundancy payment of £6,923.
In return for giving up the additional lump sum (£10,384), they could be
awarded additional scheme membership (‘added years’) of 1 year 279 days.
This would increase their lump sum retirement grant to £13,323 and their
annual pension to £4,441 a year.
Employees aged 50 or over with less than 3 months pensionable service
Lump sum compensation payment based on age and length of service as set
out in the Compensation for Redundancy - Payments plus a refund of
pension contributions (or a transfer of pension rights to a new pension
arrangement). The compensation payment includes the employee’s
entitlement to statutory redundancy pay.
Example
An employee, aged 55, with 12 years continuous local government service but
just 2 months pensionable service, earning £20,000 a year, is made
redundant. They are entitled to a total of 45 weeks pay (£17,307) as
compensation for redundancy – this includes the statutory redundancy
payment of 18 weeks pay (£6,923).
As they have not been a member of the LGPS for at least 3 months, they are
entitled only to a refund of their pension contributions (less deductions for tax
and national insurance). As an alternative to a refund, they could transfer their
accrued pension rights to another pension scheme.
Employees aged under 50 (pensionable and non-pensionable)
Compensation calculated on age and length of service as set out in
Compensation for Redundancy - Payments. The compensation payment
includes the employee’s entitlement to statutory redundancy pay.
Where the person is pensionable, pension benefits will be calculated on
actual service deferred until normal retirement age or transferred to another
pension scheme provider. Unless transferred beforehand, the deferred
pension benefits can be paid at any time from age 60.
Subject to pension scheme rules, such employees will be given the option to
waive their lump sum compensation in excess of the statutory payment in
return for additional pensionable service of equivalent value although the
extra benefits would not become payable until the pension scheme benefits
are released (e.g. at age 60).
Example:
An employee, aged 40, with 12 years continuous local government service
and 8 years pensionable service and earning £20,000 a year is made
redundant. They are entitled to a total of 30 weeks pay (£11,538) as
compensation for redundancy – this includes the statutory redundancy
payment of 12 weeks pay (£4,615).
The pension benefits accrued would amount to a lump sum retirement grant
of £6,000 and a pension of £2,000 a year. These amounts would be index
linked and the benefits would be paid at age 60.
If the employee is a member of the LGPS, they would be given the option of
taking just the statutory redundancy payment (of £4,615) and waiving the
additional lump sum compensation (of £6,923) in return for an enhancement
of their (preserved) pension benefits. In this example, the enhancement would
amount to 1 year 232 days increasing the preserved benefits to a lump sum
retirement grant of £7,227 and a pension of £2,409 a year (payable at 60).
As the preserved benefits cannot normally be paid before age 60, however, it
is unlikely that this will be a very attractive option for many people in these
circumstances.
Employees who leave the service on grounds of efficiency of the service
Employees aged 50 or over with at least three months pensionable service
will receive immediate payment of their pension benefits based on their actual
service (unreduced). No other compensation will be payable.
Example:
An employee, aged 55, with 12 years pensionable service and earning
£20,000 a year is made redundant. They are entitled to immediate pension
benefits, without reduction for early payment. The sums payable would be a
lump sum retirement grant of £9,000 and a pension of £3,000 a year.
Whilst there is no actual lump sum compensation payable, not only are the
scheme benefits being released (at least) five years early but also they are
not being reduced to reflect their early payment.
Teachers
Where a teacher retires on grounds of redundancy, or in the interests of
efficiency, before age 60, Teachers Pensions pay benefits that have been
reduced for early payment. The Council is required to pay the difference
between the unreduced and the reduced benefits. This is known as
‘mandatory compensation’ because the Council are required to make the
payment, it is not a discretion. Therefore cost of pension benefits for teachers
retiring early is split between the LEA and the Teachers Pension Fund.
Should a School's Governing Body decide to award benefits in excess of
those provided for within Council policy then the cost will be charged to the
individual school's budget.
Employees aged 50 or over, with at least 2 years service, who do not
contribute to the Pension Scheme
Compensation calculated on age and length of service as set out in
Compensation for Redundancy - Payments. The compensation payment
includes the employee’s entitlement to statutory redundancy pay.
Example:
An employee, aged 55, with 12 years continuous local government service,
earning £20,000 a year is made redundant. They are entitled to a total of 45
weeks pay (£17,307) as compensation for redundancy – this includes the
statutory redundancy payment of 18 weeks pay (£6,923).
As they are not members of the pension scheme there are no pension
benefits payable. However, if they have part-time service in the past (normally
before 1987 but occasionally before 1993 depending on hours worked) it may
be possible to pay a small lump sum gratuity payment to cover the period
when they were not allowed to join the local government pension scheme.
Ill-health retirement
Employees with at least 3 months pensionable service will receive immediate
benefits, based on their pensionable service, in the form of an annual pension
(paid monthly) and a lump sum retirement grant.
In addition, those employees with five years' or more pensionable service will
receive "added years" which will increase their benefits. These benefits are
funded totally by the Pension Fund and are payable regardless of the
employee's age at the time of retirement. The pension is payable for the
remainder of the employee's life and thereafter for the period during which any
dependants are eligible to receive benefits. The pension is "index linked" from
the outset which means that the cost to the Pension Fund of releasing the
benefits early will continue to increase over the years.
Example: Employee aged 39 with 9 years service and pensionable pay of £15,000
would receive benefits based on 18 years' service.
Employee would receive:
Retirement pension - £3,375 per annum, index linked
Lump sum retirement
£10,125 (tax free)
grant While the cost of ill-health retirements is borne by the Pension Fund it should
be borne in mind that this will ultimately affect directorate budgets in the form
of salary/wages and on-costs.
Where the employee is suffering from a terminal illness with a life expectancy
of less than one year, it may be possible to pay the pension in the form of a
lump sum payment. In such exceptional circumstances, directorates are
advised to contact the Pensions Group for further advice.
Re-employment
Re-employment following early retirement efficiency/redundancy
Employees who leave the service on grounds of early retirement or
redundancy will not normally be re-engaged in any capacity, including as
consultants, for a period of two years. Re-employment before the expiry of the
two year period will be determined on an exceptional basis by the Head of
Personnel & Development in order to maintain consistency of approach
across the Council.
Directorates who wish to re-employ a former employee within the two year
period must seek the approval of the Head of Personnel & Development
before making a verbal or written offer of employment. Applications should be
made in writing outlining the full circumstances of the case including the
benefits received by the employee from the Council on leaving the service
and the reason why the post cannot be filled by other means.
When considering whether to re-employ account must be taken of the
financial commitment that has been made by the Council to that employee in
the form of redundancy payments, compensation or ongoing pension. These
payments are funded by the directorate and the 'added years' part of the
pension remains as an ongoing commitment to the directorate.
People who are re-employed will be treated as new starters and any previous
service with the Council or another public authority will not count towards
entitlements to notice periods, sick leave, annual leave, maternity, probation
etc.
Re-employment may affect the pension of a person who has taken early
retirement therefore they should be advised to contact the pensions team to
find out the effect on their pension before they accept an offer.
Re-employment following retirement on grounds of ill-health
Ill-health retirement is granted to an employee who is declared by the
Council's Occupational Health Physician to be permanently unfit to perform
the duties of his/her post in local government service on grounds of ill-health
or infirmity of body or mind.
As a result, an employee who has received premature retirement, on ill-health
grounds, from any local authority should not be re-employed in any capacity
within the Council without prior approval of the Occupational Health Physician.
It is extremely unlikely that an employee will be able to be re-employed into a
job of a similar nature to that previously held. Re-employment into jobs of a
different nature may be considered but approval will depend on the nature of
the employee's continuing incapacity and the duties proposed. If the
employee is certified fit for further employment then the case should be
referred to the Head of Personnel & Development for approval. If the OHP
considers the former employee unfit for further employment then the
appointment process should cease. It is therefore essential that no formal
offer of employment is made until medical clearance from the Council's
Occupational Health Physician and the approval of the Head of Personnel &
Development is received.
Implications for pensions
It should be borne in mind that under the Education (Teachers) (Amendment)
Regulations 1997 teachers who are granted ill-health retirement on or after 1
April 1997, cannot be re-employed as a teacher while they remain
incapacitated and in receipt of ill-health retirement benefits. This applies to
work for any LEA, grant maintained school, or in a Further Education sector
institution, even on an agency basis. Teachers who were retired on ill-health
grounds before 1 April 1997 may still return to teaching in a limited part-time
capacity. However, if it appears from the amount of work they undertake that
they are no longer incapacitated, their entitlement to continued payment of illhealth benefits will be subject to review.
Teachers who are granted premature retirement on efficiency or redundancy
grounds, with immediate pension benefits, may seek re-employment as
teachers, subject to Lewisham policy outlined above, but from 1 April 1997
such service will not be pensionable under the Teachers Superannuation
Scheme whether it is full or part-time.
The pensions of non-teaching employees could also be affected should they
be re-employed into local government or other related service. Further advice
on pensions and re-employment can be obtained from the Pensions Group,
Corporate Services Directorate.
Additional charge to directorates for early retirements on grounds of
efficiency of the service, redundancy or flexible retirement
In order to balance the cost of premature retirements more evenly between
the Pension Fund and Directorates an additional charge is levied against
directorates to reflect the hidden costs to the Fund in respect of lost
contributions, interest etc. This additional charge is applied to employees
aged 50 or over who retire early on grounds of redundancy, or efficiency or
are granted flexible retirement with immediate payment of pension benefits.
The charge is paid in the form of a lump sum and the budget to meet the cost
must be identified before the case is put to the corporate retirement panel.
Pensions Group will be able to provide estimates of costs in individual
cases.
Personnel & Corporate Services Sub-Committee 23 October 1997.
As amended by Pension Investment Committee 17 March 2005.
A
Compensation Scheme – Table of payments
B
Application Form for Flexible Retirement
C
Application Form for submission to the Corporate Retirement
Panel for approval for early retirements/redundancy cases.