Members aged 55 and over:
Regulations have been changed from 10 January 2019, effective from 17 April 2018 which allows deferred members who are aged 55 and over to claim the early payment of their deferred benefits.
Deferred members (who opted out) do not have to have ceased to be employed in local government employment to request early payment of their deferred benefits, if they have ceased the local government employment that gave rise to the deferred benefit then the deferred benefit can be paid.
Early retirement reductions will normally apply, since the member would be choosing to draw their benefits before their NPA (Normal Pension Age) - in most cases this is 60. If a member wishes to enquire about early payment (from age 55 onwards) of their deferred benefits they should contact: PensionFundEnquiries@wolverhampton.gov.uk. The Fund will then provide details of benefits payable including any reductions, should they wish to draw them (there should not be an Early Retirement cost payable by the former employer in these circumstances).
The early reduction factors are set by the Government and can vary from time to time. The current factors can be found on the national LGPS member website.
For Deferred members who left the scheme before the 1st April 1998, if they wish to apply to their former employer for their benefits to paid on 'Compassionate Grounds' (Unreduced - at a cost to their former employer) they should in the first instance contact their former employer (stating the reason for payment on compassionate Grounds) who will then contact the Fund to assess any potential cost to the employer.
The Fund will then calculate the Early Retirement Costs (ERC) payable by the former employer based on the requested date. The Fund aims to provide this information within ten working days of receipt of this request. The employer should have a discretion policy for payment of deferred benefits for pre 01/04/1998 leavers on compassionate grounds.
Where deferred benefits are drawn at NPA (Normal Pension Age), there will be no early retirement reductions.
NPA for deferred benefits is:
- 65 for the benefits built up before 1st April 2014
- 65 or SPA (State Pension Age) if later for benefits built up from 1st April 2014
However deferred members can now draw their benefits from age 55 and over.
Choosing to draw deferred benefits at 55-59
If a deferred member draws their benefits from 55-59, their benefits will be reduced by a percentage, to reflect the fact that we will be paying them for longer. 85 rule protection does not apply in these circumstances
Choosing to draw deferred benefits at 60 onwards
If a deferred member draws their benefits from 60 onwards, early retirement reductions may apply.
If a member wishes to enquire about early payment (from age 55 onwards) of their deferred benefits they should contact: PensionFundEnquiries@wolverhampton.gov.uk. The Fund will then provide details of benefits payable including any reductions, should they wish to draw them. The early reduction factors are set by the Government and can vary from time to time. The current factors can be found on the national LGPS member website.
If a member does not wish to draw their deferred benefits early, the Fund will automatically contact the member in advance of their NPA to provide details on their unreduced benefits from their NPA.
If the member wishes to ask for their former employer's consent to receive early payment of their deferred benefits unreduced (at a potential cost to their former employer), they should in the first instance contact their former employer who will then contact the Fund to assess any potential cost to the employer. The employer should have a discretion policy for payment of deferred benefits for leavers from 01/04/1998 and waiving any reductions.
Early payment on ill-health grounds
If you are contacted by a former member (any age) with deferred benefits, who wishes to claim their benefits early on ill-health grounds, you will need to request from the Fund the appropriate M1(D) form - dependant on when the member left - and arrange for the former member to be assessed by your Independent Registered Medical Practitioner (IRMP).
In this event, no early retirement cost is calculated by the Fund, however any ill-health retirement will increase an employer's pension liabilities and these will be calculated at the next triennial valuation, or earlier if the employer ceases.
Employers that have ceased to be a WMPF LGPS Employer
Where a member wishes to enquire about early payment on compassionate grounds (pre 01/04/1998 leavers) or the waiving of any reductions (leavers from 01/04/1998), if the member's former employer has ceased to be a WMPF Local Government Pension Scheme (LGPS) Employer, in some circumstances, WMPF must make that decision. In this eventuality, WMPF policy is that, where there is a financial cost to the Fund, we will normally decline the request for early payment, however each case will be considered on its merit.