Section 18 - Retirement process for members

A member wishing to voluntarily retire should give their employer the required period of notice. It is the employer’s responsibility to inform Southwark Pension Services of a member’s leaving date, reason for leaving and final Pensionable Pay by completing a leaver form and posting it to them using the contact details on the website within 15 working days of a member’s final salary payment.

Please refer to the Fund’s Pension Administration Strategy (PAS) for full details.

Once Southwark Pension Services have the information, they we will work out the benefits the member should be paid, and send these details to the member’s home address with the following forms for completion and return:

• Bank or building society details for the payment of pension and lump sum (if applicable);
• Lifetime Allowance for HM Revenue and Customs to ensure benefits don’t exceed the maximum allowed; and
• Pension option form for the member to elect the amount of commuted pension, any options in regard to an AVC contract and lump sum (if applicable).

You will need to provide the Pensionable Pay details for the member on the leaver form, and if the member has been in the LGPS before and after 1 April 2014, you will need to provide final pay and Pensionable Pay by reference to two different definitions.

If a member has service before 1 April 2014, (or transferred-in service before 1 April 2014), the Pensionable Pay used to calculate those benefits is defined under the LGPS (Benefits, Membership and Contributions) Regulations 2007. This is usually the Pensionable Pay for the last 365 days of the member’s employment or, if higher, one of the previous two years.

The meaning of Pensionable Pay under the 2007 Regs states that it is the total of all the salary, wages, fees and other payments paid in respect of his employment; and any other payment or benefit specified in his contract of employment as being a pensionable emolument.

But the calculation of a member’s Pensionable Pay should not include payments for non-contractual overtime; any travelling, subsistence or other allowance paid in respect of expenses incurred in relation to the employment; any payment in consideration of loss of holidays; any payment in lieu of notice to terminate his contract of employment; or any payment as an inducement not to terminate his employment before the payment is made.

However, if the member has suffered a reduction (drop in hourly rate) in their permanent Pensionable Pay since April 2008 and within 10 years of leaving date, the best average of any three consecutive scheme years within the last 13 can be used instead, if this will be higher than one of the last three years.

Please note if the final year is not used, cost of living increases will be added to the Pensionable Pay figure that is used to calculate the retirement benefits.

If the member worked part-time please see read Section 15 - How to calculate full-time equivalent (FTE) pay under the 2007 Scheme definition.

For the post-1 April 2014 Career Average Revalued Earnings (CARE) pension account, Southwark Pension Services will use the actual Pensionable Pay, as notified by you, the employer.

The LGPS Regulations 2013, clearly states the definition of Pensionable Pay as all the salary, wages, fees, and other payments paid to the employee, and any benefit specified in the employee's contract of employment as being a pensionable emolument, this includes all bonuses and overtime.

Pension payments are made on the 20th of each month (or on the preceding working day if the 20th is a weekend or Bank Holiday) directly to the member’s nominated bank account.

Each April the pension will be adjusted in line with any cost of living increases (Consumer Prices Index) that have accrued, and notification of the relevant increase will be issued by the end of each April.

Southwark Pension Services aim to contact the member within eight working days of receiving all the information needed from the employer.

When the member has completed pension forms and returned them to Southwark Pension Services, they will then aim to issue a BACS payment within eight working days. This will be for any lump sum and any arrears of pension. A letter with the breakdown of pension will be sent to the member’s home address. The pension will then be paid monthly in arrears into the specified bank or building society account on the 20th of each month. Visit the contact page for contact details.