Some LGPS retirements incur a shortfall cost, which needs to be paid by you as the member's LGPS employing authority. 

In these circumstances, we will write to you to confirm the cost and to request written confirmation of its acceptance by someone authorised to release LGPS benefits.

You can ask for an estimate of the cost of a retirement using the E1 form on our Redundancies and other retirements page, prior to making your decision. However, once you have ceased the member's employment on the grounds of redundancy (if they are aged 55 or older), or on other terms that incurred a cost, payment of the shortfall is mandatory.

It should be noted that the greater the pension benefits due to the member, the greater the cost will normally be. If the member has not been in your employment for long, it should not be taken for granted that the shortfall cost will be small, as you may not be aware of the member being subject to a TUPE in the past, or if they have transferred in pension benefits from another employment.

How shortfall costs are calculated

The calculation of the cost uses a factor based on the members age, which is multiplied by the reduction that would normally be applied to the members benefits for taking them early.

Generally members' benefits aren't payable without reduction until their State Pension age, so the earlier the member is retired the greater the reduction would have been applied, therefore the greater the shortfall when the reduction is waived, in whole or in part.