The retirement process
Step 1: You decide whether retirement is right for you
Your annual benefit statement and a discussion with your employer on your options will help you and your financial adviser to decide whether retirement is right for you and what your planned date of retirement should be.
To retire you need to contact your employer to resign, or to take flexible retirement.
Step 2: Your employer tells us to process your retirement
From Worcestershire Pension Fund’s perspective your actual retirement starts when your employer provides us with a Leavers Form.
If you are retiring and are 55-59, please make sure that your employer ticks the request for immediate payment of benefits box on the form.
Step 3: We contact you to finalise the details of your retirement
Once we have received the Leavers Form, we will contact you with the paperwork we need you to complete.
The key decision that you will be asked to make is whether you wish to exchange some of your annual pension for extra tax-free cash at retirement. NB There are HMRC limits on how much tax-free cash you can take.
No matter what age you are at retirement, giving up £1 of annual pension increases your tax-free lump sum by £12.
Step 4: We set you up as a pensioner
Once all the required paperwork is received by us, you will be set up on our pensioner payroll.
Your tax-free lump sum will be paid direct to your bank account with your first monthly pension payment.
You will receive your monthly pension direct to your chosen bank account on the last working day of each month.
HMRC tells us how much tax to deduct from your pension.
Step 5: We administer your pension
You will receive a pension pay slip for your first month.
You will receive a pension pay slip for any month where a change has been made to your bank account, address or the amount paid differs by more than £1.
You will receive a P60 each year to confirm the amount of pension and tax paid in each tax year. Please keep these in a safe place for HMRC and your future reference
Your pension will increase each April in line with any rise in the Consumer Prices Index over the 12 months to the previous September.
Step 6: We are advised of your death
On your death it is important that whoever is looking after your affairs lets us know as soon as possible, so that we can stop your pension being paid and put in place any new pensions which may be due.
On your death, your spouse or qualifying partner will be entitled to a pension for the rest of their life.
On your death a lump sum death grant may be paid to your nominee(s).