When an employee retires

Pensions and retirement

Guide

When employees retire, make sure they receive any occupational pension(s) that they are due.

If employees retire at state pension age, they will need to make a claim for the state pension or consider options to defer it.

State pension

Currently, the state pension age for men is 65. On 6 April 2010, the state pension age for women started to increase gradually from 60 to 65. From 2019, the State Pension age increases for both men and women to reach 66 by October 2020. The government is planning further increases, which will raise the State Pension age from 66 to 67 between 2026 and 2028.

To check the incremental age increases in pension age for both men and women you can check your state pension age

It would be helpful to confirm that they have received a claim pack from The Northern Ireland Pension Centre, which will normally write to invite a claim around four months before a person reaches state pension age. A claim pack will be unavailable prior to the four month period.

However, if your employee hasn't received a claim pack or wants more information on the state pension, including how to defer it, they should contact The Pension Service. Northern Ireland Pension Centre contact details.

Occupational pensions

If you run an occupational scheme and your employee is a member of it, write to the trustees or managers of the scheme to let them know the retirement date. The trustees or managers will then:

  • work out what the employee will be entitled to on retirement
  • write to the employee shortly before retirement with details of any tax-free lump sum that they may be entitled to
  • provide details of the amount of pension payable and the date at which the first payment is to be made

If your scheme is a money purchase arrangement that is not run by a pension provider, eg an insurance company, the employee should be advised that they have the right to buy an annuity from a provider other than the one running the pension scheme. This is an alternative to receiving a pension from your scheme.

If any employee thinks they may have lost track of an old pension from a previous workplace, they may find it helpful to contact the Pension Tracing Service.

Your employees may also benefit from independent financial advice. The Pensions Advisory Service provides employer information and guidance on pensions.

You may therefore wish to consider providing this advice as an employee benefit. You can do this as a tax-free benefit as long as it is made available to all employees and costs less than £150 per employee per year.

  • The Pensions Advisory Service Helpline
    0800 011 3797
Developed with:
  • LRA