Whatever plans you have for your retirement, sometimes it’s out of your control.
If you are made redundant and are aged 55 or more and have 5 years’ qualifying service you are entitled to draw your pension early. However, your benefits will be reduced for early retirement, the reduction being in the region of 4% for each year and part-year earlier than the scheme’s Normal Pension Age.
Please note, for redundancies before 1 October 2013 your employer will ensure that you receive the full benefits, they will pay the cost of removing the effect of the early retirement reductions. From 1 October 2013 they will not have to do this, although they may enhance your benefits at their discretion.
Choosing not to draw your pension
It’s not compulsory to take your pension if you are made redundant, you can ask to draw this early at some point in the future, at which time the effect of the early retirement reductions will be less as you are retiring closer to the scheme’s Normal Pension Age.
If you were made redundant before October 2013 and choose not to draw your pension, then you can choose to draw this in full in the future and your previous employer will still pay the cost of providing your full pension.
Early retirement in other circumstances.
If you leave for other reasons (excluding ill-health) and decide to draw your pension before the scheme’s Normal Pension Age, then this is at the discretion of USS. Any pension paid will be reduced
If the trustee company agrees to any early payment of your benefits, the reduction is currently about 4% for each year and part-year early.
Early payment of benefits transferred to USS
Benefits in respect of transfer value payments received into the Career Revalued Benefits section from other pension arrangements will also be reduced in the same manner if you retire before the scheme’s Normal Pension Age. Please note that it is the Normal Pension Age applicable at the time of transfer that applies, currently 65 but due to increase to 66 from April 2020.