The 'Rule of 85'

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This pension topic causes the largest number of pension enquiries, especially in light of the amendment to the Regulations in 2006. We hope that this section will answer most of your questions on this complex subject.

What is the 'Rule of 85'?

Normal retirement age in the Local Government Pension Scheme is age 65 and is the same for men and women. However, under the Rule of 85 it is possible for Scheme members to retire at any time between 60 and 65, without their benefits being reduced. Their age and service in whole years must add up to 85. So, for example a Scheme member aged 60 with 25 years membership (adds up to 85) can retire immediately with their full pension entitlement.

The Amendment Regulations 2006 provided for the 'Rule of 85' to be phased out from 1 October 2006 for new members. For existing members this date has been now changed to 1 April 2008 with protection for some older Scheme members.

Basically, Scheme members will fall into 5 categories, which are as follows:

New Scheme Members – joining after 1 October 2006
These members normal retirement age will be age 65 and if they choose to retire from age 60, their benefits will be reduced.
Existing Scheme members who will not achieve the 'Rule of 85'
These members are totally unaffected by the new rules. If they retire between age 60 and 65, their pension and lump sum would have been reduced anyway as their age and service does not add up to 85. They can still retire at any age between 60 and 65 but their benefits will be reduced.
Scheme members who are born before 1st April 1956 and can achieve the 'Rule of 85'
These members are protected by the transitional arrangements and can retire at age 60 without any reduction to their benefits.
Scheme members who are born between 1st April 1956 and 1st April 1960 and can achieve the 'Rule of 85'
These members will have some protection from a full early retirement reduction on the benefits built up from 1 April 2008. All benefits they have accrued up until this date will be protected.
Scheme members who are born after 1st April 1960
These members will have their benefits reduced on the pensionable membership they gain after 1st April 2008 until retirement age. All membership they have built up until this date will be protected.

If you need more help with this subject, please contact us.

www.wiltshirepensionfund.org.uk

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The 'Rule of 85'

What is the 'Rule of 85'?

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