You may choose to find work again after retiring. If you return to work in a role that is eligible for membership of the LGPS, your new employment may affect the local government pension you are receiving. It is the eligibility to join the LGPS that is the important thing to remember so even if you opt out of the scheme your pension could still be affected.
If you have taken Flexible Retirement then your pension will not be affected as long as you remain with same employer.
If you change employer, the general rule is that your annual rate of pension and your actual annual post retirement earnings can’t be more than the actual annual salary you left on (plus pensions increase) – if you earn more, your pension will be reduced on a £ for £ basis until it evens itself out.
If you retired before April 1st 2007 due to redundancy or efficiency, your compensatory added years pension award may be affected.
When the re-employment comes to an end or your earnings drop below your permitted to earn figure, you will start to receive your full LGPS pension again from the day after you cease the re-employment or the date of drop in pay.
The rule only applies to pre 2014 pension benefits so if you leave after 31st March 2014, draw your benefits and then return to employment, you will not suffer a reduction in respect of your CARE Pension.
If you are re-employed in a job subject to the LGPS, you can contribute to the scheme again to provide further benefits up to the age of 75 so this can sometimes offset against any reductions on your existing pension benefits.
The rules surrounding re-employment can be complicated so we recommend you contact us to obtain a permitted to earn figure before taking up re-employment to ensure you understand your options.