FLEXIBLE RETIREMENT POLICY AND PROCEDURE

Transcription

1 Human Resources May 2012 FLEXIBLE RETIREMENT POLICY AND PROCEDURE 1 of 10

2 1. Purpose and Scope This policy relates to all categories of University staff who are eligible members of one of the University Pension schemes which operates a flexible retirement scheme, and establishes guidelines for managers, staff and HR in relation to an employee requesting flexible retirement. The policy will help managers and employees to understand the options which are available in relation to flexible retirement. The regulations are complex and while the University is legally prohibited from giving direct financial advice, we are encouraged to provide information and interpretation. We hope that the policy framework that is set out here will help to inform employees to make personal retirement arrangements that take account of the wishes of the individual as well as the needs of the University. This policy and procedure does not form part of any employee s contract of employment. It may be amended from time to time with appropriate consultation with recognised trade union representatives. 3 What is Flexible Retirement? Flexible retirement means being able to draw a part of your pension benefits, whilst continuing in pensionable employment and building up further pension rights. In general terms, this means that an eligible employee can take flexible retirement at any point from age 55 years with the agreement of the University, and draw part of their accrued benefits. To do so, they must reduce both their working hours and salary within the provisions of the pension schemes guidelines. 4 Eligibility to apply for flexible retirement To be considered for flexible retirement the employee must be an active member of one of the University s pension schemes which operates a flexible retirement scheme, eligible for flexible retirement, have a minimum of two years qualifying service and be at least 55 years old. The Pensions Department should be contacted by the employee to check an employee s eligibility before any application. 5 The terms of a flexible retirement application Once eligible, an employee can choose when to make an application for flexible retirement. By applying, the employee is agreeing to a long-term reduction in their current working hours and salary of at least 20%. An application requires approval by the University and the agreement of the relevant pension scheme. Any effective date must be at least two months in the future after the approval date. 6 The minimum and maximum amount of flexible retirement (or flexing ) The minimum reduction to working hours/salary is 20% and the maximum pension that can be put into payment is 80%. 7 The total number of flexible retirement applications that can be made The employee can take part of the pension benefits (or flex ) on two occasions whilst continuing to work. Each occasion would require a separate application to be made and should be at least 12 months since the previous reduction in hours and salary. On the third occasion 2 of 10

3 the employee would have to fully retire to receive the remaining benefits. Retirement means that the contract of employment has terminated due to retirement. An employee can draw between a minimum of 20% and maximum of 80% of pension benefits. However, if 80% of benefits are drawn on the first flex there will be no option to flex again. At each flex the employee must reduce the current working hours and salary by at least 20%. Pension benefits taken before the schemes normal pension age may be subject to an early retirement reduction. 8 Increasing working hours after the commencement of flexible retirement It is not normally possible to increase working hours again after flexible retirement has been processed and has commenced. However, in exceptional circumstances, an employee s application to increase their hours after flexible retirement will be considered by the University, subject to line management support, and where a reduction in hours and salary has been effective for a minimum period of 12 months. The employee will not accrue pension benefits on the additional hours worked. 9 Reversing flexible retirement actions Once a flexible retirement request is processed and has commenced, it cannot be amended or reversed. Any changes would need to be subject to a new application. 10 Fully retiring after flexible retirement If the employee wishes to fully retire after taking flexible retirement, they should do this in the normal way. The Procedure for Retirement from the University should be referred to. 11 Advice on flexible retirement Employees are encouraged to take independent financial advice before making a decision about flexible retirement. The Pensions Department can assist the employee through the process, confirming eligibility, obtaining estimates from the relevant pension scheme and action the flexible retirement request once approved. 12 Other Pension Arrangements When planning for retirement, employees should take into consideration any state pension entitlements or other pension benefits that they have. The University cannot provide information about these arrangements. 13 Disputes Employees who are unhappy with a decision in respect of their flexible retirement arrangements are advised to contact Human Resources in the first instance to determine whether an informal resolution can be achieved. Employees who wish to formally dispute a decision in respect of the flexible retirement policy should do so via the Appeals process outlined in section of 10

4 14 PROCEDURE FOR FLEXIBLE RETIREMENT 14.1 Submitting an Application Before making an application to flexibly retire the employee should contact the Pensions Department to see if they qualify and to get estimated figures based on their application. To make an application, an employee must apply in writing using the Flexible Retirement Application Form (Appendix A) and set out the reduction in working hours they want (minimum 20%, maximum 80%), stating how this could be accommodated within his/her work area. The initial onus is on the employee to prepare a carefully thought-out application well in advance of when he/she would like the desired reduction in working hours to take effect. Any application will not be considered if the employee has made one previously within the last 12 months. An application will be considered to have been made on the day that the Faculty or Administrative/Service Department receives it Considering an Application The employee s line manager must hold a meeting with the employee to consider the request within 14 days of the application being received. An employee can be accompanied by a recognised trade union representative or by another person of his/her choice who must be an employee of the University. A representative from Human Resources may also be present. If the manager is away consideration of the application may be referred upwards or delayed until his/her return, depending on what is appropriate under the circumstances. The meeting will provide the manager and the employee the opportunity to discuss the flexible retirement request in depth and consider how it might be accommodated. At the meeting the employee should be prepared to expand on any points within his/her application. It may be necessary for both sides to compromise and both should be prepared to be flexible. Following the meeting, the line manager will write to the employee, informing him/her of the decision within 14 days of the date of the meeting. It may be necessary to extend this period i.e. the manager may need extra time to consult with other employees about covering the work. Where additional time is required, the employee will be kept informed. If an employee is asked to provide more information on their application and they unreasonably refuse, the application will be considered to have been withdrawn Where the Flexible Retirement Application is Agreed Where the application for flexible retirement is agreed by the University, the Pensions Department will obtain a full quotation based on the agreed level of flexing from the pension provider for the employee s consideration. The Pensions Department will contact the employee to discuss the quotation with them, and will notify Human Resources when the meeting has been held. The employee then chooses whether to formally accept the agreed flexible retirement by confirming in writing to Human Resources within 14 days from receipt of the figures. If the employee accepts the flexible retirement, Human Resources will write to the individual confirming this and will make the change to the employment contract. The date of this letter is the approval date. They will agree an effective date with the employee of a 4 of 10

5 minimum of two months in the future from the formal written acceptance (or approval date ). Once formal agreement has been confirmed by Human Resources, the Pensions Department will complete the paperwork with the employee, and process the pension benefits. If the employee rejects the flexible retirement, the process ends and no further action is taken. Human Resources will inform the Pensions Department of the employee s decision. The employee can withdraw a request for flexible retirement up until the effective date. However, it is important to note that if it is withdrawn, another application cannot be made for another 12 months from the date of the original application. A withdrawal needs to be made as soon as possible and in writing, to avoid misunderstandings Where the Flexible Retirement application is Refused The University can refuse the application on business grounds. (A non-exhaustive list is shown below): The reduction in hours or change to the working pattern will carry with it additional costs. The reduction in hours will have a detrimental effect on the ability to meet University customers demands The reduction in hours will have a detrimental effect on the ability of the University to provide expected operational services The workplace is unable to re-organise the work amongst existing staff The University is unable to recruit additional employees to perform the outstanding work The change will lead to a detrimental affect on quality and/or individual performance A planned structural change in the Faculty or Administrative/Service Department will not enable the request to be accommodated. If a request has been rejected, the notification to the employee will state the business reason(s) for refusal, together with an explanation on why this applies in his/her particular case Appeals Process Where an employee has had his/her flexible retirement request refused and the employee wishes to discuss further, the matter should be referred first to the Faculty Manager or Head of Administrative/Service Department for informal resolution. If the matter cannot be resolved to the satisfaction of the employee, he/she may lodge an appeal. The employee must lodge the appeal in writing to his/her Faculty Manager or Head of Administrative/Service Department for referral to the Appeals Panel within 14 days of receipt of the decision. It must be dated and state clearly the grounds on which the appeal is being made. There are no constraints on the grounds under which an employee can appeal, although the following grounds of appeal are given for guidance: Procedure - a failure to follow procedure had a material effect on the decision; Decision - the evidence did not support the conclusion reached or is inconsistent with other decisions within the University. New evidence. 5 of 10

6 The Appeals Panel will meet within 14 days of receipt of the appeal. An employee can be accompanied by a recognised trade union representative or by another person of his/her choice who must be an employee of the University. The composition of the Appeals Panel will be determined by the Faculty or Administrative/Service Department HR Manager but will be expected to comprise: As Chair, a senior manager independent from the case; A Senior member of staff from the originating Faculty or Administrative/Service Department (not party to the original request) An HR representative Senior managers are defined as staff at Grade 6 level or above. The individual raising the appeal will be informed of the composition of the Appeal Committee. Should he/she have any concerns these should be raised with the Faculty or Administrative/Service Department HR Manager who will consider the employee s concerns and may reconstitute an agreed panel. Confirmation of the appeal outcome will be given in writing, within 14 days of the date of the Appeals Panel meeting. The decision of the Appeals Panel is final and there shall be no further right of appeal. 6 of 10

7 Appendix A FLEXIBLE RETIREMENT APPLICATION FORM Please ensure you complete all sections of the form in full in order that sufficient information is available to enable proper consideration of your request. When completing sections 3 and 4 - think about what effect your reduction in working hours will have on both the work you do and on your colleagues. Once you have completed the form you should immediately forward it to your Line Manager. 1. Personal details Your full name: Name of Line Manager: 2. Application Details I would like to apply to work for flexible retirement. 2a. Describe your current working pattern (days/hours/times worked) 2b. Describe the working pattern you would like to work in future (days/hours/times worked). This should be at least a reduction of 20% in working hours. 2d. I would like this working pattern to commence from (this is an estimated date, and will be confirmed once the flexible retirement quote from the pension provider is accepted by the employee. It should be at least two months from that acceptance date) 7 of 10

8 3. Impact of the new working hours I think the proposed change in my working pattern through flexible retirement will affect the Faculty/Administrative Department and my colleagues as follows; 4 Accommodating the new working hours I think the effect on the Faculty/Administrative Department and my colleagues can be dealt with as follows; 5. Previous application for flexible retirement I have previously successfully applied for flexible retirement. YES / NO (please delete as appropriate). If YES, please complete the box below: Reduction in working hours (%): Effective date(s) for previous flexible retirement change: I confirm that I have discussed flexible retirement with the Pensions Department and they have confirmed I am eligible to apply for flexible retirement and have provided me with an initial estimate. Signed: (Employee) Name: Date: 8 of 10

9 To be completed by Manager Meeting held to discuss request on:. Those present: Brief Details of Discussion: Flexible Retirement Request Accepted/Rejected (please delete as necessary). If rejected, please give reason: If accepted, please give details of reduction in hours: Hours worked (per week):.. How worked If accepted, line manager to notify HR Department. Date HR Department notified:. 9 of 10

10 HR notifies the employee that the application has been accepted and inform the Pension Department so that they can obtain an official quotation from the pension provider. Once received, the employee formally accepts or rejects (by writing to HR) both the contractual changes offered and pension benefits offered. If accepted, Human Resources write to the employee confirming the flexible retirement, the change to contract and the effective date, informing the Pensions Department so that they can take the necessary action. If the employee rejects the offer no further action is necessary. Employee accepts quotation: YES/NO If YES, effective date of flexible retirement:. (at least two months from date of formal acceptance) Signed: Signed: (Employee) (line manager) Name: Name: Date: Date: Please pass one copy to employee and one copy to HR 10 of 10