Redundancy Payments Pensions Regulations 1965
by Liam
If you are still awake after reading the title of this blog post (and even if you are not), these little used regulations provide a means of employers who offer their employees pensions with a means of dismissing employees by reason of redundancy without making a redundancy payment or with a reduced redundancy payment. In practice, they are only likely to be of significant assistance where the employee has a defined benefit (final salary) pension or a sizeable pension pot in a defined contribution (money purchase) scheme.
The regulations only apply in limited circumstances:
1. Where the employee is entitled to draw his pension (both periodical payments and lump sum) immediately on ceasing to be an employee and the annual pension payable will be equal to or greater than one third of his annual pay, no redundancy pay is due to the employee.
2. Where the employee is entitled to draw his pension (both periodical payments and lump sum) immediately on ceasing to be an employee, his redundancy pay can be reduced by the proportion which the annual value of the pension bears to one-third of that employee’s annual pay.
3. Where an employee is entitled to draw his pension (both periodical payments and lump sum) within 90 weeks of the termination of his employment, his redundancy pay can be reduced by the proportion which the annual value of the pension bears to one-third of that employee’s annual pay providing that for each week that is to elapse between the end of employment and the start of pension payments, the weekly value of the pension is added to the proportion of redundancy pay that is payable. There is a limit of the amount of redundancy pay the employee would receive but for the 1965 Regulations on the total of the redundancy pay and pension pay added together.
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