Flexible working

Anyone who works at Luton can make a flexible working request. It doesn’t matter how long you’ve worked here or how many hours you work.

You can usually only make one formal request every 12 months but if things change and you need to make another request, talk to your manager and see what can be arranged.

You may request to work flexibly for any reason, such as:

• reduction of hours for a better work life balance
• change of working pattern to assist with caring responsibilities
  
• to help with the commute to work

Whatever the reason for your request the council will fulfil its duty to consider it reasonably. Read the flexible working guidelines to find out more.

Depending on the service, employees are able to adjust their usual working pattern by using the flexi time system.

Employees who work above their normal working hours can take the time owed as ‘time off in lieu’. This time can be used to attend appointments or can be used as time off from work.

See the flexi time and time off in lieu (TOIL) scheme document.

This process is for guidance only and is subject to change as determined by Luton Council.

The following notes are intended to give managers and employees some help in operating the flexible retirement application process. They are not intended to form part of the policy.

If you're a manager, make sure you've read the application procedure and know exactly what your remit is within your own management structure. Remember that you can only consider a flexible retirement request from one of your team if all of the following criteria are met:

• the employee is or will be aged 55 or over on their proposed flexible retirement date
• there must be zero cost/pension strain to the council on payment of flexible retirement pension benefits - you’ll need to seek confirmation of this via the HR and Payroll Transactions team in advance of making your decision
• the proposed working arrangement will result in at least a 20 per cent reduction in the employee’s gross salary either through a reduction in hours and/or grade from their substantive post
• the proposed working arrangement will meet business/service needs

If you're an employee approaching age 55 or over and are considering making an application for flexible retirement, you're advised to contact your pension provider to obtain an estimate of your pension benefits based on early retirement in the first instance.

This estimate should provide you with an insight into the extent of any actuarial reduction that is likely to apply to your pension in the event that you access your benefits early.

Your annual pension statement (issued annually in August) will also provide a guide to your pension in the event of early retirement. You may need to consider the reduction factors that apply – see appendix 4 in the retirement process document.

Requests for flexible retirement pension estimates can only be made via your manager but will only be provided to you if agreeing flexible retirement would not incur a cost for Luton Council.

You do not need to make a decision about applying for flexible retirement in order to obtain an early retirement pension estimate.

Employees are advised to fully consider the impact of an application for flexible retirement, taking into account financial liabilities and commitments. Sources of advice include:

• an independent financial advisor
• your bank or building society
• voluntary organisations such as Citizens Advice Bureau or Age Concern

Be aware that once a pension has been agreed and put into place, it cannot be recalculated and an actuarial reduction, once in place, cannot be rescinded.

If you're employee who's considering the flexible retirement option, you should look into the possible impact of future events on pension payments over the longer term. Advice in this respect can be obtained from your pension provider.

You may also wish to consider alternatives to flexible retirement such as a straightforward reduction in contracted hours, or in the situation that there will be an employer cost, consider early retirement or deferral of the date of your flexible retirement.

Further information on flexible retirement arrangements operated by the occupational pension schemes can be found on the following websites:

• Local Government Pension Scheme (LGPS)
• NHS Pension Scheme (NHS)
• Teacher’s Pension Scheme (TPS)
• Luton Council’s LGPS

1. Process for requesting flexible retirement

1.1 Normal Pension Age (NPA) is the age when you can retire and take your pension benefits without any reduction. Your NPA is the same as your State Pension Age (SPA). Your annual pension statement will provide an estimate of the occupational pension benefits you can expect to receive at normal pension age.

1.2 If you are approaching, or over, age 55 years and are considering early retirement you can request an estimate of the pensionable benefits you’ll receive if you retire in advance of your NPA.

This will give you an indication whether, having read the rules and understood the implications of accessing your occupational pension, you might wish to formally apply for flexible retirement.

2. Pension implications

2.1 Employees who are members of the LGPS, TPS or NHS scheme may be concerned about the effect of flexible retirement on your pension.

2.2 Flexible retirement before normal retirement age is likely to mean that your occupational pension benefits are reduced. The employee who wishes to access their pension early will need to accept that it will be based on reduced benefits.

2.3 Under current pension regulations, if you retire on a flexible or phased basis you're able to remain in your pension scheme and accrue a second pension based on your reduced hours and/or substantive grade.

Your second pension benefits will become payable at your pensionable age, or at least one day before your 75th birthday if you remain in employment with the council.

2.4 Where flexible retirement is agreed, the LGPS benefits will be based on all your pensionable service accrued up to the date of the reduction in hours and/or substantive grade. These benefits will be payable with reductions as per the table at appendix 4 in the retirement process document.

2.5 Special pension provisions and protections apply to those employees who meet the ’85-year rule’ in whole or part and are over 60 years of age.

2.6 Dependent upon individual circumstances and pensionable service, a request for flexible retirement may incur a cost to Luton Council. In this situation flexible retirement cannot be agreed.

3. Application procedure

3.1 Should you wish to apply for flexible retirement please complete the application form at appendix 2 (questions 1 and 2) in the retirement process document and forward this to your immediate manager. (See process flowchart at appendix 1 in the retirement process document.)

3.2 Ideally, your request should be made at least three months in advance of the proposed flexible retirement date. You're not committed to pursuing flexible retirement at this stage, should you change your mind about your future plans.

3.3 When you apply for flexible retirement you should consider and be prepared to discuss:

• options for different working hours or patterns
• compatibility of proposed working patterns with the service needs
• implications of reducing hours on individual work objectives or activities and any possible changes to contract
• implications of reducing hours on other staff and suggestions for addressing these implications

3.4 Managers should remind themselves that requests for flexible retirement cannot be agreed if one or more of the following criteria applies:

• the employee does not meet the age or membership criteria of their pension scheme
• the proposal will not result in a reduction in salary of between 20 and 60 per cent
• there will be a cost burden to the council
• there is evidence that the proposal is not in the council’s economic or operational interests.

3.5 Managers should therefore consider the application and be prepared to discuss:

• inability to proceed with flexible retirement where there will be any direct cost at all to the council
• the impact upon achieving individual, team or service objectives and meeting business needs in the short, medium and long term
• the benefits of the proposal which may include improved productivity, morale and commitment, retention of key staff and skills and/or salary or other cost savings
• the feasibility and impact of the work on colleagues
• ability to secure cover for the remaining hours and duties, such as reorganise work amongst existing staff or recruit additional employees
• timing of retirement - implications for service delivery
• equality considerations - the request to reduce working hours may be in relation to personal commitments such as caring responsibilities and such requests should be considered sympathetically
• agreeing part-time working requests can open opportunities for succession planning, mentoring of other employees and bringing new employees into the service
• where the arrangement proposed by the employee cannot be accepted for economic or operational reasons, possible alternatives should be discussed at the meeting with the employee

3.6 Following receipt of a request the employee’s manager will:

• without delay, complete part 1 questions one to seven of the pensions request form (appendix 3) providing their details at the top of the form and a signature. This should be sent via email to: [email protected] – who will complete questions eight to twelve and despatch the form to the Bedfordshire Pension Fund for calculation of employer costs
• Bedfordshire Pension Fund requires the manager’s details and signature on Part 1 of the form and may be unwilling to provide a response without this
• arrange to meet with the employee to discuss their request within 28 calendar days
• at this meeting the employee must be advised that their application will not proceed if there any direct costs associated with flexible retirement and early release of their pension
• weigh up the potential benefits to the employee and to Luton Council against any adverse impact of implementing the changes
• consider the request with the relevant service manager and decide in principle subject to confirmation of zero cost to Luton Council from Bedfordshire Pension Fund
• receive notification from HR and Payroll Transactions team whether there would be a cost to the council if flexible retirement were agreed
• following the meeting notify the employee in writing of the decision in principle, subject to confirmation from the pension provider that there will be zero employer cost (if this has yet to be received)
• in the event that there is zero cost, with the employee’s permission (part 2 of pension request form) arrange for an estimate of flexible retirement benefits to be sent to the employee
• allow the right of appeal

3.7 Each request will be considered on a case-by-case basis; agreement to one request will not set a precedent or create the right for another employee to be granted a similar change to their working pattern.

3.8 A decision in principle to the flexible retirement working arrangement, subject to either confirmation of zero cost to the council and/or an estimate of benefits, must be made and communicated in writing to the employee within 14 calendar days of the meeting.

3.9 The letter should confirm the agreed details of the flexible retirement, or state that the request has been refused. The letter must also inform the employee of their right to appeal and the process to do so. Email HR Services for the letter.

3.10 In the event that your decision is to refuse the request due only to economic or organisational reasons, you’ll need to evidence these reasons in order that they are available to an appeal panel.

3.11 On receipt of confirmation of zero cost to us, and agreement in principle to the flexible retirement proposal, the employee and manager should complete part 2 (page 3) of the pensions request form and email it, together with part 1, direct to the Bedfordshire Pension Fund, to arrange for an estimate of the flexible retirement pension benefits and options to be sent to the employee.

3.12 Members of the NHS 2008 section and 2015 pension schemes or TPS will need to apply direct to their respective pension schemes for an estimate of benefits.

The pension’s estimate form will need to be completed by the applicant and then sent to the council’s pension queries mailbox for onward transmission to the appropriate pension provider.

The pension’s team will also provide details of pensionable pay. The pension provider will provide an estimate of benefits direct to the employee. (Note: Flexible/phased retirement benefits under these schemes are automatically reduced with no accrual of cost to the council.)

3.13 If on receipt of the pension estimate the employee still wishes to proceed with flexible retirement, and subject to the service manager’s agreement to the flexible retirement application, the service director will need to countersign part 2 of appendix 2, the request for flexible retirement application form, to release the pension.

Once the service director’s agreement has been given the decision and arrangements for flexible retirement will be confirmed in writing by the service manager.

3.14 When arrangements are agreed, the Pensions team at Bedfordshire Pension Fund, should be notified in writing at least four weeks before the date of the flexible retirement. This must be done by printing off the estimate of retirement benefits form sent to them by the Pensions team and signing it.

Please note that no action can be taken by the Pensions team without signatures from the service director and the employee.

3.15 In addition, the employee changes form must be completed immediately detailing the flexible retirement change, where reduced hours have been agreed and forwarded to HR and Payroll Transactions team (HR Services).

3.16 Where the employee wishes to move roles to a lower graded post, they will usually need to apply for and secure a post through the normal recruitment processes.

It is advisable to commence the flexible retirement application process prior to applying for a new post to clarify whether there would be a cost to the council. Should there be a cost the flexible retirement application cannot proceed.

3.17 The HR and Payroll Transactions team must retain a copy of the employee’s request and a copy of the final decision letter, for the employee’s personal file.

4. Right of appeal

4.1 The employee has a right to appeal against the decision if the flexible retirement application is refused. Appeals should be made in writing to the relevant service director, within 14 calendar days following receipt of the written confirmation of the decision.

The service director or their representative will hear the appeal and their decision is final. The service director may wish to invite an HR adviser to this meeting for advice and guidance on the procedure.

4.2 The appeal meeting would normally take place within 14 calendar days of receiving the letter of appeal.

4.3 Although there is no statutory right to be accompanied, we’ll permit the employee to be represented and accompanied by their trade union representative or a workplace colleague of their choice at the appeal. However, it's the employee’s responsibility to arrange their representation.

If the employee’s representative is not available on the date arranged for the meeting, an alternative date must be arranged as a matter of urgency, preferably taking into account the representative’s availability.

4.4 At the end of the appeal meeting, the service director will decide whether the request for flexible retirement can be approved. The decision will be sent to the employee in writing within 14 calendar days after the appeal meeting date. There is no further right of appeal.

5. Implications

5.1 The following arrangements will apply where an employee’s request for flexible retirement is granted.

5.2 Pay

Employees whose hours are reduced through flexible retirement will be paid on a pro-rata basis, according to the number of hours worked.

Payment for employees moving to a lower graded post will be in line with normal rules. If higher than the minimum point of the grade the service director will need to authorise and provide a business case.

Pay protection will not apply. Any pre-existing pay protection will cease at the point of taking up flexible retirement.

In the event an employee is subsequently made redundant, the redundancy payment will be calculated by reference to their pay at the time the redundancy takes effect.

5.3 Leave

Employees opting to reduce hours through flexible retirement will be entitled to leave on a pro-rata basis, according to the number of hours worked. Bank holiday entitlement will be calculated on a pro-rata basis.

5.4 Continuous service

Provided there is no break in service and the employee remains in the employment of Luton Council, then continuous service will be preserved.

6. Further information and advice

6.1 Further information and advice on this policy and its application can be obtained from HR and Payroll Transactions on 01582 546629 in the first instance.

7. Flexible retirement: frequently asked questions

7.1 Flexible retirement sounds attractive – how do I know I will be able to afford it?

If you’re a member of the Local Government Pension Scheme, are approaching or aged 55 and over and are thinking about exploring your options regarding flexible retirement, it's recommended that you contact Beds Pensions Fund.

You can request an estimate of the benefits that would be payable to you if you retire early on a particular date at least three months in the future.

As flexible retirement benefits will be at least the same as early retirement benefits, you’ll then have sufficient information to be able to think about the nature of your flexible retirement request. Would you be seeking a reduction in hours or thinking about applying for a lower graded post?

Management will make an ‘in principle’ decision about your flexible retirement proposal subject to confirmation from Beds Pensions that no costs will fall to the council if flexible retirement proceeds.

Once confirmation of zero costs has been obtained you’ll be able to apply for an estimate of flexible retirement benefits.

Any questions you may have about your Local Government Pension Scheme benefits should be referred to Bedfordshire Pension scheme administrators.

Please note that the pension you receive as a flexible retiree will continue to be paid and will not change for the remainder of your life (other than cost of living rises.) It is not reversible.

7.2 If I reduce my hours and take flexible retirement working, for example, three days a week, can my working hours later be adjusted down, or up?

Flexible retirement once agreed is intended to be a permanent arrangement. Management in agreeing to your flexible retirement may have utilised or reallocated the funding for your post so an increase in hours would not be possible.

For hours/days to be adjusted down further, this may be possible by making a request through the flexible working request process. Your manager will need to agree this and may consider the original flexible retirement criteria that the overall reduction in salary should be between 20 and 60 per cent.

If you have accrued at least two active year’s pensionable service after your flexible retirement you may wish to access the additional LGPS pension benefits that have accrued since your flexible retirement.

In this situation you would need to make a second flexible retirement request. Bear in mind though that your benefits would be reduced in line with actuarial reductions determined by the LGPS.

7.3 What happens to a flexible retiree who is subsequently made redundant?

Redundancy is due to work of a particular kind diminishing or ceasing. Flexible retirement would not impact on the efforts to redeploy you into an alternative role. However, this would be based on your current ‘new’ working arrangements/grade/hours.

If redeployment is not successful and a redundancy situation occurs after you've flexibly retired, then you'd receive redundancy pay based on your current ‘new’ job and salary. You may also receive any secondary pension benefits you've accrued at the date of your redundancy, dependent upon the circumstances.

7.4 If a flexible retiree is later subject to a restructure, could they then be downgraded?

As with all council employees subject to an organisational change process, if your employment is formally at risk of redundancy after a restructure has been approved, you may be offered suitable alternative employment in a role at the same grade, one grade above or one grade below.

Your status as a flexible retiree will not affect your treatment in a restructure. If the new post is one grade below your current grade, then the normal pay protections, as set out in the organisational change and redeployment policies at that time, will apply.

7.5 Will my car benefit/essential car user allowance be affected if I flexibly retire?

Car benefit is paid pro-rata to part time employees on grades M3 to M8 and any reduction in hours whilst in the post results in a proportionate reduction in car benefit. The same will apply if you reduce your hours on flexible retirement.

If, rather than reduce your hours in your current post, you move to a lower grade post (M3 to M8) and remain a full-time employee, then the car benefit will not be reduced as it is currently paid at a fixed rate to all posts on these grades. If you move to a post below M3, you’ll lose the car benefit payment altogether.

Essential car user lump sum allowance is paid at a flat rate and does not change when hours are reduced. However, if you reduce your hours and this impacts on the frequency that you use your vehicle for work purposes, you may lose the allowance if you do not meet the relevant pro-rata criteria.

This would also apply if move to a lower graded post then that post would need to meet the essential car user criteria for you to continue to receive it.

7.6 What will happen if I am off sick or on annual leave after flexible retirement?

Your pay during periods of leave will be linked to your new salary. Flexible retirement based on a reduction in hours will mean that your entitlement will be reduced on a pro-rata basis from the date of your flexible retirement.

7.7 Will I be issued with a new contract of employment?

If you remain in the same post and agreement is given to your flexible retirement through a reduction in hours, you’ll be issued with a letter setting out the change in hours, pay and allowances.

As other terms and conditions are unlikely to change, you should expect to receive a variation to contract letter. A new contract is unlikely to be needed unless there is a change of role accompanied by a change of terms and conditions.

7.8 Does agile working, such as working from home, apply still to flexibly retired employees?

Changing your working hours and pattern of work at flexible retirement will be, as always, subject to agreement by your manager. You should set out your proposals/request in your application for flexible retirement.

In the same way, agile working would also need to be discussed with management at the meeting to consider your flexible retirement request.

Management will want to assure themselves that the business/working arrangements in the reduced role are acceptable. Management will only be able to agree flexible retirement where the arrangement meets business needs and there is no cost to the council.

7.9 Are there death in service benefits (3x salary) whilst continuing to work and drawing a pension?

Pension rules are complex, and this is a question that is best directed to the LGPS experts on the pension scheme. Here are the links to flexible retirement and death in service.

7.10 Will I be entitled to a retirement gift and other retirement benefits if I am allowed to flexibly retire?

No – entitlement to a retirement gift and other retirement benefits (subject to criteria being met) are granted at full retirement.

7.11 If I am allowed to flexibly retire and my circumstances change, am I allowed to apply for other positions, promotion, or secondments?

Flexible retirement, once agreed and in place, is intended to be a permanent arrangement until you fully retire. However, if your circumstances change and you wish to apply for another permanent position in the council you should apply in the usual way.

You would need to have the approval of your manager to apply for a secondment or temporary opportunity in line with normal practice.