From age 55, if you reduce your hours or move to a less senior position, and provided you have met the two year qualifying period in the Scheme and your employer agrees, you can draw some or all of the pension benefits you have built up – helping you ease into retirement. You must draw some pension.
As you will still be working for a Scheme employer, you will continue paying into the Scheme and building up further pension until you fully retire, unless you choose to opt out.
Do I have to withdraw all my pension benefits when I take flexible retirement?
You must draw all or some pension on flexible retirement and it can be made up as follows:
- all of the benefits that you built up before 1 April 2009, plus
- all, some or none of the benefits that you built up between 1 April 2009 and 31 March 2015, plus
- all, some or none of the benefits that you have built up after 1 April 2015.
If you only have benefits built up on or after 1 April 2009 you must draw all or some of them on flexible retirement. You cannot take none.
Will my pension and lump sum be reduced if I take flexible retirement?
If you take flexible retirement before your normal pension age, your benefits may be reduced as they will be paid early, unless your employer agrees to waive some or all of the reduction, or you meet the Rule of 85.
If you take flexible retirement after your normal pension age, your benefits will be increased as they will be paid later.
Membership built up to the date of flexible retirement will count towards deciding whether you have the two years’ minimum membership to qualify for benefits when you finally leave your continuing employment, but will not count towards any Rule of 85 protections you may have had.