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Question Early retirement possibilities?

3 years 6 months ago #39502 by DampSquib
Hi, with all the budget cuts, we like so many other schools have been given a consultation on money saving measures. Natural losses of staff not being replaced along with some merging of departments, reducing the curriculum etc put forward and we have been asked to think of other solutions.

So, without going headlong into anything we may live to regret, I wonderer if anyone has any info on the following?

A few support staff, including myself, are in our 60s or late 50s, we wondered what we could expect if early retirement was offered. The reduction in LGPS pension for leaving before our state pension can be removed, but things I have read talk about 'enhanced pension'. Has anyone know or experienced this? We wondered what figures 'enhanced' could mean. Assuming the enhancement will cost the school, they may not be prepared to do it anyway.

I recall a technician at the school I was at 15 years or so getting an early pension at 50 (has to be over 55 now) she was delighted with the deal! Unfortunately I didn't know the deal and we didn't keep in touch.

Any info or insight that is too sensitive to post here, can you please PM me. Thanks.

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3 years 6 months ago - 3 years 6 months ago #39505 by Baldilocks
As someone who has retired early (twice) I can give a little insight, but I think that your employers might have a number of options that I know nothing about, so my experience may not be much use.

My first retirement was on 'full' pension, but that was not what I would have got if I'd stayed to the end.

When you retire normally you normally get the state pension + whatever other pension that you have paid into. They can't do anything to change your state pension. The other pension is based on an equation based on years of service and earnings.

If you stop working early then your years of service will stop increasing AND your pension pot/earnings/final salary will stop rising (with inflation).

If you take your pension early then they will reduce your pension by about 5% for every year before the 'proper' date (actuarial reduction).

If they offer you early retirement then the only things that I can see as changeable are:

Increase the apparent number of years that you have worked.
If you have worked 25 years and you're not due to retire for 5 more but they give you those extra 5 then they are boosting your pension by 5/25=20%

Increase the size of your pot. This means a big cash input NOW. I can't see how that will benefit them but what do I know?

If you take your pension now they may waive the actuarial reduction. That's what happened with me. I collected my pension about 7 years early so my pension should have been reduced by 35% but wasn't.

That is only my take on it and I may be very wrong, and I am certain that there are other solutions.

My best advice is to contact the Wesleyan. They specialise in teacher's pensions and are specialists in this area. Other school staff are on a similar scheme so they understand the issues. My wife asked for a personal assessment and was pleasantly surprised to find that it would pay her to retire a year early! This is because she loses the 5% actuarial reduction but DIDN'T pay the enhanced contributions to boost her pension since the pension crisis hit.

The Wesleyan will come in and give talks on pensions in schools. You could ask the support staff who are in your situation if they want someone to talk to all of you.

Google 'Wesleyan teachers' for more.

It is probably a good idea to Google "early retirement enhanced pension" as well.

Ian

“Do not believe everything you read on the Internet.” -Abraham Lincoln
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3 years 6 months ago #39512 by DampSquib
Thanks for all that information. Very helpful and insightful. I'll tell the others about the Weslyan teachers too.

Meanwhile, I'm trying to get the school union rep to arrange an urgent meeting with us and get her ask about whether redundancy / early retirement etc is on the cards and if there would be any 'incentives'.in enhancements etc. during the upcoming meeting of reps with the HT next week.

I've tried googling, but nothing came up about LGPS and school support staff, which is why I thought about asking fellow technicians for any experiences, so thanks for all this.

Nothing may come of this anyway, but best to be prepared with all the information we can get.
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3 years 6 months ago #39529 by tom foxe
My employer ran a contributory pension scheme, and it allowed us to increase our contribution. This would bring an increase in the employer contribution, but this had an upper limit, so I increased my contribution for a couple of years up to the point where its profitability ran out. You might consider asking your employer about a possible lump sum if you took voluntary redundancy ?

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3 years 6 months ago #39570 by TecHKnow
Once again,, we were offered Voluntary redundancy this very week on 104 weeks Full time equivalent Salary up to a maximum of 24 years. This would have got me about £38000 less tax.

After careful consideration, I decided not to take it because I am 52, a bit too early to retire. I would find it difficult to get a job that paid similar to what I'm earning right now in my immediate locality,I would have to daily commute. The money received would only last me no more than two years at the most.

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3 years 6 months ago #39571 by TecHKnow
Once again,, we were offered Voluntary redundancy this very week on 104 weeks Full time equivalent Salary up to a maximum of 24 years. This would have got me about £38000 less tax.

After careful consideration, I decided not to take it because I am 52, a bit too early to retire. I would find it difficult to get a job that paid similar to what I'm earning right now in my immediate locality,I would have to daily commute. The money received would only last me no more than two years at the most.

Please consider buying me a drink for Christmas by making a donation to the website - Happy Christmas and Thank you!

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3 years 6 months ago #39572 by DampSquib
Oh, TecHKnow, what an offer! If that is what I was offered, you wouldn't have seen my heels for dust! - but I do understand, getting a new job in your 50s is really difficult.

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3 years 6 months ago #39574 by AndyG

DampSquib wrote: Oh, TecHKnow, what an offer! If that is what I was offered, you wouldn't have seen my heels for dust!


+1 for that ... even being in my 50's I'd push shopping trollies for a few hours a week to make up the income. At my age, I feel time is more valuable than money.
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3 years 6 months ago #39575 by chf102
Check out the 85 rule which means if your pension contributions and your age add up to 85 you can retire on full pension. Check with your pension provider if this is offered.

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3 years 6 months ago #39576 by DavidS
I was 60 when offered voluntary redundancy so was able to take up my LGPS money as well so decided after 42 years doing this malarkey to see what future held and enjoying things as I can do my own schedule etc.but in some respects still miss interactions with students but not paperwork and exasperations! :bang

It is best to remember that when you are up to your waist in Alligators that your original intention was to drain the swamp!
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3 years 6 months ago #39579 by AndyG

chf102 wrote: Check out the 85 rule which means if your pension contributions and your age add up to 85 you can retire on full pension. Check with your pension provider if this is offered.


The LGPS was squished a few years ago (2006?) which removed the full 85-year rule pension rights. Unless you were a member of the LGPS prior to that, I don't believe you have any entitlement under the 85-year rule.

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3 years 6 months ago #39580 by DampSquib

AndyG wrote:

chf102 wrote: Check out the 85 rule which means if your pension contributions and your age add up to 85 you can retire on full pension. Check with your pension provider if this is offered.


The LGPS was squished a few years ago (2006?) which removed the full 85-year rule pension rights. Unless you were a member of the LGPS prior to that, I don't believe you have any entitlement under the 85-year rule.


The LGPS is alive and well! - but you are right that you needed to be in the scheme before sept 2006 to be able to take up 'the 85 year rule'; Unfortunately I fall short of the year's needed as I didn't join the LGPS until I joined this school 11 years ago. Now I wish I had joined when I first became a school tech, but I don't think I earned enough in the first school and then I felt I really couldn't afford it when offered to at the second school.

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