Date posted: 01/08/2008
Audience: This Notice will be of particular interest to:
- HR Managers and policy teams; and
- All staff involved in the processing of partial retirement applications
Action: To note the additional step in the partial retirement process; and
Ensure that everyone who handles partial retirement applications receives this information
- Partial retirement was introduced from 1 March 2008, enabling members who permanently reshape their job and reduce their pensionable earnings by at least 20%, to take some or all of the pension they have built up while continuing to work.
- EPN204 told you about your responsibilities in the partial retirement application process.
- It is important that everyone involved in the partial retirement process is kept informed of the member’s final decision to partially retire. There have been occasions where the APAC or HR team has not been notified whether or not partial retirement is going ahead. This is placing unnecessary work with APACs and delaying the processing of applications. We are introducing an additional step in the process which will improve the lines of communication between you, the member and your APAC. This new step ensures that job reshaping has happened, or is taking place, before the payment of the lump sum and/or pension is made.
Introduction of CSP16
- Your APAC will send you a form CSP16 to confirm that the member’s partial retirement is going ahead. You must then confirm that the details on the CSP15 remain correct, before completing and returning the CSP16 to your APAC. They can then arrange for payment of lump sum and/or pension to be made to the member. If at any time you become aware that the member’s partial retirement is not going ahead you should tell your APAC straight away.
- A copy of form CSP16 is at Annex A and a revised partial retirement process chart is set out at Annex B. Please make sure that everyone who handles partial retirement applications receives this information.
- The following points remind you of your other responsibilities within the process:
Timing of applications
- When advising your APAC of the start date of the reshaped job, you must provide the exact date and not just the month in which the job reshaping occurs.
- You must send forms CSP15 and CSP16 promptly to your APAC to allow them as much time as possible to process the award, otherwise the member may go onto their reduced salary before the lump sum and pension has been awarded.
20% salary reduction
- When working out the reduced salary you must ensure that the criteria for the 20% reduction are met. You are responsible for ensuring the accuracy of the data you or your payroll provider pass to your APAC. It is not the APAC’s responsibility to check the information you are providing.
- You should remember that a 20% reduction in hours does not always equal the required 20% reduction in salary and that you must include additional allowances or shift pay in your calculations.
- You must ensure that the CSP15 form is completed fully so that your APAC has all the information they need to process the award.
- The CSP15 form is frequently being used as an estimate request by members who want confirmation of their pension amount before making their final decision. It is your responsibility to ensure that before completing their application the member has read the booklet ‘Partial retirement – a guide for scheme members’ and used the partial retirement calculator. They can find this on our website under ‘guidance for members/ calculators’.
- You must agree and authorise all partial retirement applications before sending them to your APAC as they cannot provide the estimate without your confirmation that you agree to the job reshaping and that the member’s earnings will reduce by at least 20%. Members must not send the form directly to their APAC as this will delay the implementation of the partial retirement..
Revision or cancellation of applications
- You must remind the member to consider partial retirement carefully, paying particular attention to the calculator and estimate quote before making their final decision. It is your responsibility to contact your APAC and tell them not to process the award if the partial retirement does not go ahead.
This document refers to EPN204
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