retirement planning GUIDANCE
Human Resources April 2011
Adopted by MayfieldSchool on 23rd May 2011
Introduction
The Council is committed to equal opportunities for all its employees and recognises the contributions of a diverse workforce, including the skills and experience of older employees. As such, the Council does not operate a compulsory retirement age for its employees and is committed to supporting employees as much as possible in how they approach their retirement and the options that are available to them.
It is also important for the Council to be able to manage the workforce effectively for the future for service and succession planning to support the organisation in achieving its business objectives. It is therefore important for employees and their managers to consider and discuss working plans for the future.
This guidance has been developed to support this process and to signpost to other forms of advice and guidance that are available.
Scope
This guidance has been developed for use across the Council, including certain Schools (Community, Community Special and Voluntary Controlled). It is recommended that other Schools adopt this guidance.
Equality Statement
This guidance applies equally to all Council employees regardless of their age, disability, sex, race, religion or belief, sexual orientation, gender reassignment, pregnancy and maternity, marriage and civil partnership. Care will be taken to ensure that no traditionally excluded groups are adversely impacted in implementing this guidance.
Retirement Planning
In order to assist employees with their personal retirement plans and to facilitate service and workforce planning, it is recommended that retirement planning takes place well in advance of the individual’s actual intended date of retirement. Planning ahead helps two-fold – for the employee, it means there is time to successfully put into place their own retirement plans and to properly explore all available options. For the organisation, planning ahead of the individual’s retirement can enable their skills and experience to be successfully passed on to other team members and for any necessary training to be put into place.
In planning their retirement, employees will want to gather as much information as possible to help them make the right choices. They will therefore need to give themselves adequate time to gather information from all relevant sources, e.g. any pension schemes they may belong to, entitlement to state retirement benefits and/or external sources of advice and support, such as independent financial advice.
It is strongly recommended that the employee and their manager take time to fully discuss and consider the options available for retirement. This can be whether they are planning to retire in the near future or not. It is important for the line manager to get an idea of the employee’s future plans, even if they are not confirmed, to support them and to also help plan future service delivery.
Pre-retirement Discussions
It is good practice to have workplace discussions about future aims and aspirations with all employees, not just those that are planning or considering retirement. There is no definitive timescale about when discussions should take place between the employee and their manager although it is recommended that the employee’s line manager discusses their future plans with them on an annual basis at least, for example, through their RADAR/annual appraisal process as part of their general review.
Employeeswho are considering retirement may have already communicated their plans for the future, this may be well before they reach eligibility for their pension (whether that be the current state pension or if they are a member of the Local Government/Teachers’ Pension Scheme). There will be some employees who will wish to continue working for as long as possible and so discussions about retirement may not seem a priority.
Retirement Process
Employees who have made a firm decision to retire should inform their manager in writing,a template letter is available from the Human Resources intranet page, as follows:-
Employees should give notice to their manager at least in line with the notice period outlined in their employment contract, although as much advance notice as possible is recommended wherever possible to ensure that the necessary leaver and pensions paperwork (if applicable) can be processed in good time. Members of the Local Government Pension Scheme should contact the Council’s Pensions Team with regard to accessing their benefits, Tel: 01803 20 7410/7380. Members of the Teachers Pensions Schemeare advised to contact the TPS directly for advice regarding their individual pension benefits and access to them:-
Managers should acknowledge the employee’s intention to retire and plan a meeting with the employee to discuss and agree any final details regarding leaving arrangements. The manager should complete a Leaver’s Notification form and also conduct a Leaver’s Interview with the employee before their last working day. The Leaver’s Notification form and Leaver’s Interview form and guidance notes are available from the Human Resources intranet page as follows:-
Managers are advised to use the template retirement acknowledge letter which is available from the HR intranet page, as follows:-
Options-Phased Working and Retirement
Retirement decisions are usually an individual choice, and one where the individual may not only be thinking about pensions and their financial situation but also about making changes to their lifestyle and how to make the transition from working to retirement. Flexibility and choice enables employees to begin to adapt their working styles to changing circumstances and ultimately, facilitate the transition from permanent employment to retirement.
Depending upon personal choice and whether the individual is a member of the Local Government Pension Scheme (LGPS) or Teachers Pension Scheme (TPS), there are different options that may be explored, depending upon whether the employee wants to continue working or to retire completely, as follows:-
Phased Working
Flexible Retirement - this is an option available to certain members of the LGPS from age 55 years and can assist the transition between working and retirement by allowing the individual to reduce their work commitments and take their retirement pension at the same time. It is only currently available to employees who do not meet the 85 year rule, this is explained further within the Flexible Retirement policy, available from the Human resources intranet page:-
Employeeswho are eligible to apply for flexible retirementcan request to work in a reduced capacity, by either reducing their working hours by a recommended minimum of 40% (i.e. from 5 days to 3 days if employee works full-time) or by reducing their job grade, i.e. to a post with lesser responsibility,where one is available (usual application process would apply). Requests are considered in line with a standard procedure and must be approved by the Council. There has to be no pension cost to the Council associated with an individual taking this option. For further information see the Flexible Retirement policy.
Phased Retirement – this option is available to members of the TPS only and enables membersaged 55 and over, with the agreement of their employer, to change the capacity in which they are working so that their pensionable salary is reduced by at least 25% compared to the average of the salary they have received during the preceding six months. The reduction in salary, which must last for at least 12 months, could be as a result of moving to part time work or taking up a post with less responsibility. Further information regarding Phased Retirement can be obtained from the Teachers’ Pensions Scheme website, with examples and information about the process for applying:-
Important Note:-
LGPS scheme members can continue to pay into the pension scheme up until they reach 75 years if they are still in employment. They must, however, notify the Pensions team a month prior to 75th birthday as they not able to stay in scheme after 75 years.
Retirement
Voluntary Retirement - For LGPS members aged 60 years and upwards, they can decide if they want to retire and start drawing their pension without employer consent.
State Pension - For employees who are not members of either the Local Government or Teachers’ Pension Scheme, they can take the decision to retire and draw their state pensionfrom the minimum state pension age (i.e. 65 years for men and 60 years for women although this is currently rising). It is advisable to get further guidance in regard to claiming state pension entitlements, further information can be obtained from the Directgov website as follows:-
State Pension age is the earliest age at which State Pension may be claimed, however, it is not always necessary to retire from work in order to claim it. There are various options that are availableas follows:-
- stop working and claim State Pension;
- carry on working and receive State Pension as well;
- carry on working and defer claiming State Pension.
State Pension is available to anyone who has reached the current eligible age and who has paid the sufficient amount of National Insurance Contributions. The state pension age is currently 65 for men and 60 for women but since 6 April 2010, the State Pension age for women has started to increase gradually from 60 to 65. It is set to rise to 66 for both men and women by 2020. A state pension age calculator is available form the Directgov website below which gives the state pension age based on an individual’s personal details:-
The Pension Service contact individuals directly before they reach their State Pension age with regard to claiming their pension.
It is advisable for employees to contact HMRC (Her Majesty’s Revenue and Customs) once they are receiving their state pension to check their tax coding is correctto prevent a delay that might result in an overpayment or underpayment of tax or National Insurance contributions.
Further information is available from the Directgovand HMRC websites:-
Other Reduced Working Hours Options
Flexible Working Request (reduction in hours)
Employees who are carers of children up to 17 years of age or have care responsibilities for adults over 18 years of agehave the legal right to request flexible working in order to vary or reduce their working hours, location or work pattern. This might include requesting to reduce hours in order to work part-time or to work from home on a regular basis. This is a right to request a variation to working conditions only and has no link with either the Local Government or Teachers’ pension schemes or their release(please see Flexible Retirement above).
Although the legal right only applies to parents and carers who meet certain criteria, the Council’s policy is to consider all requests for flexible working from all employees regardless of whether they meet the legal criteria.
For further information see the Flexible Working Requests policy, available from the Human Resources intranet page:-
Voluntary Reduced Working Hours Scheme
The Council operates a reduced working hours scheme whereby employees can apply to reduce their working hours for a period of up to one year and also have their pay protected if their post is made redundant during this time. This means that if the employee’s request to reduce to 25 hours per week from 37 hours for example, and their post is then subsequently made redundant, any redundancy pay due will based on the employee’s usual full-time salary. Under the Scheme there is no link with either the Local Government or Teachers’ pension schemes or their release, however, this is another option for employees to consider if they wish to reduce their hours on a temporary basis, as opposed to a more permanent arrangement under the Flexible Working Request procedure described above.
For further information see the Voluntary Reduced Hours Scheme, available from the Human Resources intranet page:-
Ill-health/Capability Issues
The Council will not make the assumption that an employee’s health or performance will decline with age. Therefore, if there are any concerns regarding an individual’s performance or health, these will be dealt with in the usual way via the Managing Attendance policy or Capability Procedure, available from the Human Resources intranet page.
Information and Support
Pensions
Torbay Council’s Pensions Team can provide advice to members of the Local Government Pension Scheme about their entitlements which can help them in considering and planning their options. Contact details:-
Human Resources
Pensions Team
Town Hall
Castle Circus
Torquay
TQ1 7DR
Tel: Kim Marshall01803 207380
Lee Haywood01803 207410
E-mail:
The Local Government Pension Scheme is administered by Devon County Council and general information about the Scheme may also be obtained by them:-
Teachers Pensions Scheme – employees are able to contact the Teacher’s Pension Scheme directly for advice regarding their individual pension benefitsand access to them:-
Exemptions and Benefits
Age Exemption Certificates – once an employee reaches state pensionage and if they continue working they are exempt from paying National Insurance Contributions. The employee should send a copy of their Age Exemption Certificate to Payroll in order for their NIC’s to be stopped. Employees should contact the National Insurance Contributions Office to request an Exemption Certificate. The Payroll team will contact employees who have reached state pension age to requesttheir Age ExemptionCertificate if ithasn’t already been received, however, it isalso advisable for the employee to contact the National Insurance Contributions Office to request this prior to reaching state pension age:-
Other benefits may also be claimed once an individual reaches state pension age, for example, free bus passes and travel concessions and winter fuel payments. Further information regarding these and other benefits can be obtained from the Pensions Services website:-
Pre-Retirement Seminars
With their line manager’s consent, Torbay Council employees have access to the Retirement Planning Seminars run by Devon County Council at their offices in Exeter. The programme covers a wide range of retirement issues, ranging from financial planning and legal considerations to lifestyle changes, such as volunteering or further learning opportunities. There is a cost associated with attending the seminar which will be the responsibility of the employee’s Business Unit. School based employees are also able to attend these seminars at the same cost.
In order to book a place on the seminar, employees should first seek consent from their line manager and then refer directly to Devon County Council’s on-line booking system, link as follows:-
Further details about the course can be obtained from the Human Resources intranet page as follows:-
For further enquiries about the course, please contact Devon County Council’s Training team, Tel: 01392 383542.
Fluent Financial Advisors– Fluent provide a financial advisory service and can provide advice to individuals. They run seminars at the Council which are free for employees to attend. Dates/times of seminars are circulated via Daily News to employees. Further information about the seminars can also be obtained fromFluent directly, as follows:-
Email:
Tel: 0870 099 4130
Contacts and Further Information
Local Government Pension Scheme (general information):-
Teachers Pension Scheme - Retirement Planning Information and Factsheets available from:-
State Pension Information
Directgov – Guide to Planning Your Money for Retirement
Age UK
Policy Feedback
Should you have any comments regarding this guidance, please address them to the HR Policy Feedback mailbox –
This guidance agreed by the Single Status Group in February 2011 and was first issued in April 2011.
Date / Page / Details of Change / Agreed by:Policy review date – April 2014 unless legislation/operational reasons require it before this date.
April 20111