Hampshire Pension Fund “What about my pension?” A presentation to staff

1. Hampshire Pension Fund“What about my pension?”A presentation to staff Phil Villiers Pensions Communications Officer Pensions Services

2. ‘Warning’ • This presentation reflects the structure of the Local Government Pension Scheme (LGPS) as at November 2010. • The Government have announced a review of public sector pension provision, which could lead to changes to the LGPS in the future. • At this stage we are unable to advise what changes, if any, will be made and when they will take effect. • We will advise scheme members as soon as any changes are announced.

3. Summary • Scheme overview • Final salary – currently! • Leaving service before age 65 • “What if I’m made redundant? I’m under 55” • Deferred benefits • “What if I’m made redundant? I’m over 55” • Immediate pension benefits • Remaining in service • Flexible retirement • Re-deployment • Reducing hours • Where can I get more information?

4. Scheme overview Final salary (currently!) • Pension/tax free lump sum • Pre-April 2008 service: • 80ths pension + 3/80ths tax-free lump sum • Post-April 2008 service: • 60ths pension • No additional tax-free lump sum • Option to give up pension for tax-free lump sum • Normal retirement age 65 • See our website for more details • www.hants.gov.uk/finance/pensions

5. Scheme overview Leaving service before age 65 • ‘Accrued’ benefits • benefits built up at date of leaving (called ‘deferred benefits’) • based on completed membership and final pay • Can retire from age 55…but • can only retire below 60 with employer consent • accrued benefits % reduced for early payment, • if 85-year rule not satisfied • ‘85-year rule’ • applies to those who • joined scheme before 1 October 2006 and • whose age plus ‘service’ in completed years = 85 • full protection to 31 March 2016 if born before 1 April 1956 • ‘partial’ protection if born after 31 March 1956 • See our website for more details

6. “What if I’m made redundant? I’m under 55” Deferred benefits – no special terms • leaving benefits built-up in scheme, based on • final pay and • completed membership • at date of leaving • payable from age 65 • ‘index-linked’ from date of leaving to retirement • can be paid from age 60 • but will be reduced if 85-year rule not satisfied • can be transferred to another scheme before retirement • eg new employer’s scheme, personal pension • See our website for more details under past member

7. “What if I’m made redundant? I’m over 55” Retirement on enhanced benefits • Immediate payment of benefits built-up in scheme • pension plus tax-free lump sum • option to give up some pension for more tax-free lump sum • Based on • final pay and completed membership at date of leaving • Noreduction for early payment • You cannot take deferred benefits instead – if you’re over 55 you must draw immediate benefits!

8. “What if I’m made redundant? I’m over 55” Retirement on enhanced benefits • Additional contributions • cease at date of leaving • Added years • Option available to pay remaining contributions in contract • ARCs • No option to pay remaining contributions in contract • Reduced benefit paid, based on contributions paid to date of leaving • AVCs • Fund used to increase pension and/or tax-free lump sum • Redundancy payment • Option to use non-statutory element of redundancy payment to increase pension • ‘Ready reckoner’ available

9. “What if I’m made redundant? I’m over 55” Retirement on enhanced benefits • Pension in payment • subject to income tax, not N.I. • pensions increases • annual review in April • based on annual increase in Consumer Prices Index (‘CPI’) at previous September • may be ‘abated’ if you are subsequently employed by an employer that participates in the LGPS. • For more details see our website • ‘Got a question A-Z’ • (R)e-employment

10. Remaining in service – flexible retirement • Available if over 55 • With employer consent, • drawing benefits early and • continuing working on reduced hours/lower grade* • *level of reduction included in employer discretionary policy • Retirement benefits payable: • as if leaving service voluntarily and retiring with employer consent, • so reduced for early payment, unless 85-year rule applies • ‘Abatement rule’ does NOT apply on flexible retirement • Can continue paying into LGPS to build up additional benefit

11. Remaining in service -re-deployment Change job: • Existing job • deferred benefit at date job ceases • New job • re-join scheme for future service • So two separate membership records • can join up if you apply within 12 months of re-joining

12. Remaining in service -re-deployment Remain in same job with pay freeze or reduction: • Remain in current membership: • On leaving service, alternative final pay definitions may apply: • Best of the last 3 years • Average of best 3 consecutive years in the last 10 • If employer allows, defer existing membership: • cease existing membership and defer benefits • re-join scheme for future service. • May not be best course of action – several factors to be considered • For more details see our website: • Got a question A-Z • (R)eduction in pay

13. Remaining in service – reducing working hours Pension benefits are linked to • ‘Whole-time equivalent’ membership and • ‘Whole-time equivalent’ final pay So if you reduce your working hours • your completed period of membership is not reduced • your future ‘part-time’ membership will be converted to a ‘whole-time equivalent’ period • at retirement, all your benefits are linked to your ‘whole-time equivalent’ final pay • For more details see our website: • Got a question A-Z • (P)art time working/membership

14. Where can I get more information? • ‘Any questions?’ • Employee guide • Website:www.hants.gov.uk/finance/pensions • Pensions Services: • Email pensions@hants.gov.uk • Tel 01962 845588