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  7. Flexible Retirement Scheme

The provision to flexibly retire is contained within the Local Government Pension Scheme regulations. A flexible retirement request is where an employee seeks the Council’s consent to either reduce their hours of work and/or grade of post, at the same time accessing their pension benefits either in full or in part. As a result the employee would not have to retire completely from employment. The employee can also continue to pay contributions into the pension scheme and accrue further pension service once the change in hours and/or grade has occurred.

The Council recognises that benefits of flexible retirement can include:-

  • an improvement to an employee’s work life balance
  • the retention of experienced employees with valuable skills
  • the extension to employees’ working lives

Attempts will be made to accommodate flexible retirement requests where they are financially and operationally feasible, with cases requiring the approval of a Service Manager.

1. Eligibility

The following are conditions that MUST be met before a flexible retirement arrangement can be approved and amended working arrangements are put in place:-

  • The employee must be a member of the Local Government Pension Scheme
  • The employee must have at least 2 years’ service in the pension scheme
  • The employee must be aged 55 or over.
  • The employee’s basic salary must reduce by at least 25%. This can be achieved either through a reduction in hours or a reduction in grade
  • The employee must apply for flexible retirement in accordance with the agreed procedure
  • Normally, only one application may be made by an employee in any 12 month rolling calendar period

Once a flexible retirement arrangement has been agreed and implemented, any subsequent contractual changes arising from a flexible retirement application must result in a continued reduction of at least 25% of the employee’s salary. All further changes may only be made by mutual consent.

In addition, where a flexible retirement is agreed, the benefits payable will be subject to any applicable actuarial reduction. The Council will not waive any such reduction in whole or in part.  The Council has sole discretion whether or not to approve applications for flexible retirement.

Where an employee, who is 55 or over, seeking Flexible Retirement meets the Rule of 85 and the case is approved, the Council automatically meets the Strain on the Fund cost.

2. The Procedure

Click on the image above to view the flowchart

Stage 1 – Making an Application

The employee will complete the Flexible Retirement Application Form, referring to the eligibility criteria  stated above and submit it to their line manager. The application will be made on the basis of a reduction in contractual hours and/or a reduction in grade, with the criteria in the  having to be met.

Stage 2 – Meeting with Line Manager

The employee’s line manager will examine the request and arrange to meet with the employee to discuss it and explain the process for a flexible retirement application. If the request is also linked to a caring responsibility then the Council’s Smarter Working (Accessed via Internal Network only) guidance  must be referred to for details on how a statutory request for flexible working is considered.

Stage 3 (i) Where a flexible retirement request is linked to a reduction in hours

Where the request is for a reduction in hours, an estimate of pension benefits for flexible retirement would be obtained from the Pensions Section by the manager at the appropriate time and passed to the employee (the employee can seek the quote themselves if they are 60 years of age or over).

Where a Service decides that the requested reduction in hours is operationally and financially feasible, also noting that the employee’s salary must reduce by at least 25%, then the proposal can be further explored. In this circumstance an assessment of the workload implications for others will need to be undertaken. Where the reduction in hours means that changes to the duties and responsibilities of other posts within the Section are required, consultation with the trade unions and/or affected employees will be undertaken in advance. Any changes to posts that result in grading changes must be contained within budget for that service area. The Service Manager must ultimately approve (or otherwise) the flexible retirement request, with the employee then verbally notified of the decision (and a letter of confirmation issued under either Stage 4 or 5 below).

Stage 3 (ii) Where a flexible retirement request is linked to a reduction in grade

Where the request is for a reduction in grade (amounting to at least a 25% reduction in their salary), the employee will have made the application and met with their line manager (i.e. stages 1 and 2 above). This will have included a discussion on the type of post they would be interested in that would facilitate their request. The employee’s manager at that time will check whether the post(s) would represent the required reduction in salary. The manager will notify the relevant manager if the post(s) is/are located out with their team and span of responsibility. The employee’s request will be considered at the time the particular post falls vacant. An estimate of pension benefits for flexible retirement would be obtained by the manager from the Pensions Section at the appropriate time and passed to the employee (the employee can seek the quote themselves if they are 60 years of age or over). The manager of the team in which the relevant vacancy occurs will consider the request taking the following into account:

  • Whether the employee meets the job requirements (an interview may be required to assess this)
  • Whether the employee’s transfer to the lower graded post inhibits career progression/succession planning (which may lead to retention problems)
  • Whether the employee’s transfer will restrict the ability to redeploy someone whose employment is at risk (either on redundancy or medical grounds). Such individuals at risk must be given preference
  • Whether there are any other objective factors that may affect the justification of the transfer

The manager will decide whether the flexible retirement request can be accommodated taking these factors into account and ensuring that the case is financially* and operationally feasible, with the relevant Service Manager ultimately approving (or otherwise) the request on the flexible retirement application form. The employee will then be verbally notified of the decision (and a letter of confirmation issued under either Stage 4 or 5 below).

*To also see accompanying guidance notes

Stage 4 Notifying Pensions Section and Letter of Confirmation

If the case is approved to progress (on the basis of either a reduction in hours or grade), a letter of confirmation of the flexible retirement arrangement will be sent to the employee by the Manager, and the completed form and copy of the letter forwarded to the HR Service Centre. The Pensions Section  will be notified through a copy of the letter and requested to administer the employee’s pension benefits. The employee will be asked in the letter to confirm to the Pensions Section whether they wish to access their pension benefits in full or in part, with the Pensions Section available to explain the figures to the employee, where required. Amended contractual documentation would be prepared and issued to the employee by the HR Service Centre.

Stage 5 Right to raise a Grievance through Managing Grievances Procedure

Where a request for flexible retirement on the basis of either a reduction in hours and/or grade was refused, the employee will be informed in writing by their Manager with the reason(s) for the refusal given.  The letter will indicate that the employee has the right to raise a grievance with their Chief Officer at the Formal Stage of the Managing Grievances procedure  within 10 days of receiving the outcome letter, if they consider the decision to have been unfair.

It should be noted that an employee can request both a move to a lower graded post and on fewer contractual hours than their current post through the flexible retirement procedure.

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