Redundancy or efficiency | Oxfordshire County Council

Redundancy or efficiency

What employers need to do in the case of a redundancy or efficiency.

If you dismiss an active member from employment  who is aged at least 55 and has at least two years in the LGPS, due to redundancy, business efficiency, or whose employment is terminated by mutual consent on grounds of business efficiency, that member is entitled to, and must take immediate payment of their unreduced pension relating to that employment

There is likely to be a hidden cost incurred by the employer for allowing early retirement.

The process for this retirement should start with the employer completing an HR request for pension estimates (docx format Kb) and sending it Pension Services. We will then calculate and inform the employer of the likely cost of this retirement and the terms of the repayment.

When retirement for someone aged at least 55 is agreed, send Pension Services the Retirement Confirmation Form (docx format, 54KB)

This is the formal confirmation of the employer’s approval of early pension payment.

However we cannot start the pension calculation until we have details of the members ‘final pay’ and CARE pay on the leaver line of your appropriate MARS return.

You must submit the complete leaver details and the appropriate CARE details and the MARS return must be supplied to the  email account before the 19th of the month following the relevant month.

Pension Services cannot begin the benefit calculation until the employer has supplied all actual pay details and confirmed no further payments are due, and the reason for leaving shown carries an entitlement to an immediate pension.

Pension Services will calculate retirement benefits and inform the member of their payment options

We will contact you about the payment of the retirement's hidden cost and repayment period, shortly after starting the first pension payment. As a pension following redundancy or efficiency is due immediately, it is essential that

  • Employer completes the Retirement confirmation form (docx format, 54KB)
  • Full and complete information is supplied on the MARS and CARE pay return
  • Member is given guidance about the timescales to expect and what information they will have to supply before payment is possible

Indication of timescales for this retirement

The following can only be a broad guide to the information exchange between the employer, Pension Services and the member leading to the pension payment, because everyone is different and individual

  • Step one - Pension Services receives Retirement confirmation from employer
  • Step two - Retirement confirmation dates noted and expected work noted in the Pension Services work list, high priority.
  • Step three - Within 10 days of receiving all leavers pay and ‘final pay’ details, from the employers monthly data submission MARS (due every month before the 19th of the month after payment), Pension Services will send the member information about the options available in a provisional retirement declaration letter.  The provisional declaration retirement letter will allow the member to:
    • Decide their proportions of permissible tax free lump sum and pension
    • Know how to use any AVC fund held with the Prudential, if applicable
    • Supply all the personal details to ensure Pension Services hold a full pension record
    • Ensure correct tax and pension savings details held and acted on.
  • Step four - Payment date will depend on when and how the member replies to the provisional options

Reminders for all employers

You must complete the leaver section on the MARS return and the CARE pay details for ALL leavers.

When a pension is due immediately, the reason for leaving must be shown.

Pension payments will be delayed if the monthly MARS, with the full leaver, ‘final pay’ and CARE pay details are not supplied.

Pension Services cannot assess benefits unless employer has supplied confirmation of leaving, reason for leaving and full pay details.

Contact Pension Services if you have any concerns on any of these matters

Advise your employees about the possible timescale involved before payment

More information

 Go to the 'Hidden cost’ and repayment page to find out more

Last reviewed
23 February 2018
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