Proposed changes to our Premature Retirement scheme were put on hold in June 2009 to enable further consultation and equality screening. As a consequence, in June 2009 we reverted to the original scheme which enabled teachers who were about to be made redundant to access their full pension without actuarial reduction.
The Minister has yet to determine what will happen in 2010. However, as a consequence of the level of misinformation circulating in the system, I have attempted to provide a short summary of the situation at this point in time.
We are in receipt of a letter from the Department which states that from April 2010 the Employers will be liable for compensation payable in cases where they have agreed to grant premature retirement. In other words, if the employer chooses to grant early retirement and access to pension they will be required to meet the substantial costs associated with the early payment of unreduced pension benefits and the cost of any discretionary “added years” enhancement. Consequently, although the Department plans to make available at least £6m to help the employing authorities manage redundancies, it is unlikely that early access to an unreduced pension will be on offer to anyone.
The regulations provide for enhanced severance as an alternative to granting premature retirement benefits. In England this severance payment can be up to 102 weeks pay. This would equate to approximately two years salary and therefore for teachers who are close to the age of retirement this could be a very good package indeed. However, it is not clear from the DE letter if 102 weeks pay is available in Northern Ireland.
As members are aware, when a post is declared redundant, schools have been encouraged to consider the possibility of redeploying the teacher by agreement either into a vacant post or a post currently filled by a teacher volunteering for transferred redundancy. The facility to alleviate compulsory redundancies by transferring the redundancy has been effectively managed in Northern Ireland for many years.
However, any teacher who volunteers for redundancy in 2010 should be advised that they will only be entitled to the minimum statutory and improved redundancy payment which is up to 30 weeks’ salary. The opportunity for further compensation will be considered when the Department has confirmation of the numbers of redundant teachers and the availability of resources within the overall allocations for the 2010-11 financial year.
The existing provisions regarding compensation for redundancy are retained.
Please note that the minimum retirement age increases from 50 to 55 with effect from 6 April 2010 and therefore teachers under the age of 55 will not be eligible for premature retirement from that date.
Summary
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Minimum age of retirement from 6th April is 55
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Access to pension prior to the age of 60 can be achieved but will be subject to an actuarial reduction.
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It is very unlikely that early access to an unreduced pension will be offered in redundancy situations.
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In a compulsory redundancy a severance payments of up to 60 weeks salary may be available.
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In a voluntary redundancy the severance payment will be up to a maximum of 30 weeks salary but additional compensation may be offered.
