Who is eligible
If you were a member of the LGPS before 30 September 2006, the 85 year rule may apply to you.
If you joined the LGPS after 1 October 2006, the 85 year rule will not apply to you as it was removed.
The 85 year rule does not apply to current members paying into the scheme who retire voluntarily before age 60.
What the 85 year rule does
If you voluntarily retire or take flexible retirement before your normal pension age, your benefits are reduced for being paid earlier. If you meet the 85 year rule it may protect some of your benefits from reduction.
Meeting the 85 year rule
You satisfy the 85 year rule if your age at the date you draw your benefits plus your scheme membership add up to 85 or more. Part years are ignored. If you are part-time, your membership counts towards the 85 year rule at its full calendar length.
If you have left and have deferred benefits, you satisfy the 85 year rule if your age at the time you take your benefits plus the membership you would have had if you stayed in the scheme to the date you take your benefits, add up to 85 or more. Part years are ignored.
Example
You are 60 when you take your pension. You have been a member of the LGPS for 30 years.
Age 60 years + membership 30 years = 90 years.
You satisfy the 85 year rule. Some of your pension benefits may be protected from reduction.
Redundancy or retirement on the grounds of efficiency or ill health
If you are over age 55 and you have more than 2 years membership, your benefits will come into payment immediately without reductions for early payment, regardless if you meet the 85 year rule.
Retirement and reductions to your pension
If you retire at your Normal Pension Age (NPA), your pension benefits will not be reduced for early payment.
If you stop paying into the scheme after 1 April 2014, your NPA is your State Pension age (SPa), but is at least age 65. Find out what your SPa is at GOV.UK. You can choose to have your benefits paid from age 55 but they will be reduced for being paid earlier.
If you stopped paying into the Scheme before 1 April 2014, your NPA is age 65. You can chose to have your benefits paid from age 60 but they may be reduced for being paid earlier.
How the 85 year rule protects your pension from some reductions
The 85 year rule applies if you retire early from age 60.
If you left the LGPS after 1 April 2014 and choose to take your pension on or after age 55 and before age 60, the 85 year rule will not automatically apply. This is an employer discretion and you can ask your employer what their policy is on this matter.
If you were born after 1 April 1960, your benefits built up to 31 March 2008 are protected.
If you were born between 1 April 1956 and 31 March 1960, your benefits built up to 31 March 2008 are protected. Your benefits built up between 1 April 2008 and 31 March 2020 are partly protected but you must meet the 85 year rule before 31 March 2020.
If you were born before 1 April 1956, your benefits built up to 31 March 2016 are protected.
If you satisfy the 85 year rule with a deferred benefit and join the LGPS again
If you aggregate your deferred benefit with your new membership, you will lose the 85 year rule protection. However, there are other issues to consider when deciding whether or not to aggregate deferred benefits with a new membership. We will write to you to explain these when you rejoin.
Reductions to your pension if you retire before normal pension age
The reduction is calculated in accordance with guidance issued by the Government Actuary from time to time. The reduction is based on the length of time (in years and days) that you retire early. This is the period between the date your benefits are paid to your normal pension age. The earlier you retire, the greater the reduction.
As a guide, the percentage reductions for early retirement are shown in the table below. Where the number of years is not exact, the reduction percentages are adjusted accordingly.
| Number of years paid early | Pension reduction | Lump Sum reduction (for membership to 31 March 2008) |
|---|---|---|
| 0 | 0% | 0% |
| 1 | 4.9% | 1.7% |
| 2 | 9.3% | 3.3% |
| 3 | 13.5% | 4.9% |
| 4 | 17.4% | 6.5% |
| 5 | 20.9% | 8.1% |
| 6 | 24.3% | 9.6% |
| 7 | 27.4% | 11.1% |
| 8 | 30.3% | 12.6% |
| 9 | 33.0% | 14.1% |
| 10 | 35.6% | 15.5% |
| 11 | 39.5% | 15.5%* |
| 12 | 41.8% | 15.5%* |
| 13 | 43.9% | 15.5%* |
The number of years early used to determine the reduction applied to your benefits built up before 1 April 2014, is the number of years before your protected Normal Pension Age (NPA). For most members, the protected NPA is age 65. Benefits built up after 1 April 2014 have reductions applied up to your SPa.
* The maximum reduction applied to your automatic lump sum for membership to 31 March 2008 is 10 years. This is because the protected normal pension age is 65 and the earliest you can retire is age 55. There is no automatic lump sum for membership after 31 March 2008 although you can convert some of your annual pension to a lump sum. Find out about converting your pension to a lump sum