Retirement

You can retire and receive your pension benefits from age 55 as long as you have two years qualifying membership in the scheme. The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.

Your pension benefits will not be reduced if you take them from your NPA. For benefits built up from April 2014, your NPA is the same as your State Pension Age, but is at least age 65. The NPA for benefits built up in the LGPS before 1 April 2014 is protected, for most people the protected NPA for these benefits is 65.

If you were a member of the LGPS at any time between 1 April 1998 and 30 September 2006, some of your benefits could be protected by the 85-year rule.

If you choose to take your pension before your NPA, it will normally be reduced because it is being paid early and therefore longer than expected. The earlier you take your pension, the bigger the reduction will be.

If you built up pension benefits before 1 April 2014 as well as after 31 March 2014 you must take all of your benefits when you retire.

If you haven’t done so already, why not register for My Pension Online where you can calculate your own pension benefits at any time and as often as you like.

This is the normal retirement age for benefits built up before 1 April 2014. If you take your benefits from age 65 any benefits built up before 1 April 2014 will not be reduced but benefits built up after 31 March 2014 will be reduced. If you were a member of the LGPS at any time between 1 April 1998 and 30 September 2006, some of your benefits could protected by the 85-year rule.

If you haven’t done so already, why not register for My Pension Online where you can calculate your own pension benefits at any time and as often as you like.

Please see the Flexible Retirement guide for further information.

You must have two years qualifying membership in the LGPS to qualify for ill health benefits.

Your employer must be satisfied that:

• you are permanently unable to do your job until your Normal Pension Age (NPA), and
• you are not immediately capable of undertaking gainful employment.

Your employer must get the opinion of an independent registered medical practitioner (IRMP), appointed by them, before making a decision.

For benefits built up from April 2014, your NPA is the same as your State Pension age. Gainful employment is paid employment for at least 30 hours a week for a period of at least a year.

Ill health benefits can be paid at any age and are not reduced on account of early payment. Your benefits could be increased depending on the ‘Tier’ of benefit that is awarded.

The different levels of benefit are:

• Tier 1: If you are unlikely to be capable of gainful employment before your normal pension age. Ill health benefits are based on the pension you have already built up at your date of leaving plus the pension you would have built up had you been in the main section of the scheme until you reached your normal pension age.
• Tier 2: If you are unlikely to be capable of gainful employment within 3 years of leaving, but are likely to be capable of doing so before your normal pension age. Ill health benefits are based on the pension you have already built up at your date of leaving plus 25% of the pension you would have built up had you been in the main section of the scheme until you reached your normal pension age.
• Tier 3: If you are likely to be capable of gainful employment within 3 years of leaving, or before your normal pension age if earlier. Ill health benefits are based on the pension you have already built up at your date of leaving. Payment of these benefits will be stopped after 3 years, or earlier if you are in gainful employment or become capable of such employment, provided that you have not reached your normal pension age by then. If the payment is stopped it will normally become payable again from your normal pension age but there are provisions to allow it to be paid earlier. Details would be provided at the time.

Further information can be found in the Ill Health Retirement Guide – Active Member.

If you carry on working in your job after your Normal Pension Age you will continue to pay into the LGPS, building up further benefits. When you retire your benefits will be increased to account for late payment. Your pension has to be paid by your 75th birthday.

• You tell your line manager that you want to retire. You should do this at least 6-8 weeks before you want to leave.
• You must be age 55 or over at the date you want to retire to be able to receive your pension.
• The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028. This will not apply to ill health retirements.

ADNOT form

• Your line manager will tell your Human Resources (HR) team that you intend to retire. This is an important step in starting the retirement process.
• HR will complete an Advanced Notification (ADNOT) form and will send this to your payroll team. This should happen at least 4 – 6 weeks before you retire.
• Payroll will calculate your estimated final pay, update the ADNOT form and send it to the pensions team. This should happen at least 4 weeks before you retire.

Pensions send your options

• The pensions team work out your pension benefits and send your retirement options to you by email. If they don’t hold an email address for you it will be sent by post to your home address.
• If you have paid Additional Voluntary Contributions (AVCs) to the Prudential the figures provided will include the latest value of your AVC fund.

Paying AVCs?

• If you pay AVCs you may want to consider stopping your payments 1 month before you retire to avoid delays in processing your benefits. This can be done by informing your payroll team and contacting Prudential on 0345 600 0343.
• AVCs are paid to Prudential up to the 19th of the month after the month in which they were deducted from your pay. Prudential are unable to finalise your AVC fund until they have received, invested and dis-invested your final AVC payment.
• The pensions team are unable to make payment of your benefits until they have received your final fund value. This can result in delays of up to 6 – 8 weeks.

You return your option forms

• You complete and return your option forms to the pensions team.
• It is important to note the timescales below as it is not possible to pay your pension benefits on the day that you retire.

Important timescales to note

• Your payroll team will send your final pay information to the pensions team when the payroll has been finalised.
• When the pensions team receive this they will finalise your benefits.
• The pensions team would not expect to receive your final pay information until at least the 10th of the month following your leaving date, e.g. if you retire in January they wouldn’t expect to receive your final pay until on or after 10 February.

Paying your lump sum

• Your lump sum (if applicable) will be paid into your nominated bank account.
• Payments are made every Friday and payment will be made on the first available Friday following receipt of all the relevant paperwork. This can be up to 4 – 6 weeks from the date you retire.
• The pensions team will contact you to confirm the date that payment will be made.

Paying your pension

• Pension payments are paid into your nominated bank account on the last working day of each month and are processed by the Employment Support Service at North Yorkshire Council.
• Due to the normal payroll cycle, your first pension payment may be paid up to 2 months after you have retired but payments will be backdated.
• Tax will initially be deducted at basic rate until HMRC confirm the correct tax code to use. Any tax adjustments will then be made in subsequent months using the revised tax code.
• Your pension can be paid to an overseas account, however there may be a monthly charge.
• You can access your pensioner record online. Further details will be provided with your options letter.

Payslips after retirement

• A first payslip is produced when you retire but subsequent payslips are only issued whenever the payment amount changes by more than £5. Payslips are available to view on My Pension Online, where you can also keep your bank account and address details updated. If you do require paper copies of payslips you can request these from North Yorkshire Council’s Employment Support Service.
• A P60 will also be produced each tax year, they are available to view on My Pension Online. If you require a paper copy of your P60 you can request it from North Yorkshire Council’s Employment Support Service.

Lifetime Allowance (LTA)

• The LTA tax charge was abolished form 6 April 2023, however the amount of tax free cash that you can take is still 25% of the standard lifetime allowance. If you have already taken pension benefits from any other UK pension scheme, you have used up some of your lifetime allowance. The maximum lump sum you can take is 25% of your remaining lifetime allowance.
• The North Yorkshire Pension Fund (NYPF) will check if your benefits in the NYPF (only) are greater than the LTA, but we do not know about your other pensions. You will need to check the % of LTA used by other pension benefits before you sign the declaration on the Pension Claim form that we will send you. You should be able to get this information from your other pension providers.
• Your retirement letter will show how much of your LTA your pension benefits from the NYPF will use.

Benefits from additional contributions

• If you have been paying extra contributions to purchase additional membership or additional pension this will be included in the pension benefits quoted in the options letter that you will receive.
• If you have made contributions to the NYPF AVC Scheme, your options will be shown in the options letter that you will receive. If you think you have paid AVCs but they are not included in the letter please let us know.

Cost of living increases

• Your pension is increased each year on the first Monday after 5th April. Increases are fixed by the Government and are based on the cost of living (Consumer Price Index) in the year to the previous September. If the cost of living has gone down, your pension will not be reduced, it will remain payable at the same rate. If you have been receiving your pension for less than a year when the increase is due, you may only receive a proportion of the full increase. The overall increase applied may also be different if you are at or above State Pension Age.

Survivors benefits

• An ongoing pension is provided for your spouse, registered civil partner or subject to certain qualifying conditions, your eligible cohabiting partner (if you were a member of the LGPS on or after 1 April 2008) and to your eligible children. Please see the NYPF website for further details on eligibility.

Death Grant for death in retirement

• If you die before reaching age 75 a death grant will be payable and is normally 10 times the annual amount of pension you were receiving at the date of death less the amount of pension already paid from retirement date.
• The Fund may, at its absolute discretion , pay the death grant to or for the benefit of your nominee, personal representative or any person appearing to have been a relative or dependent. It is therefore important to keep your nominations up to date.

Contacting the NYPF

• Pension Help and Information Line: 01609 536335.
• Pension in payment queries (excluding lump sum payments) – tel: 01609 532190 or email North Yorkshire Council’s Employment Support Service.
• If your query relates to your lump sum payment you should contact the pension section on 01609 536335.
• Tax office: HM Revenue & Customs. PAYE, P.O. Box 1970, Liverpool, L75 1WX Tel: 0300 200 3300: Tax Reference: 406/N8001.