After 25 years with my employer, a large UK financial business, I am being made redundant at the age of 51 as they are closing my office. They offered me Voluntary Redundancy with enhanced terms on the basis I signed an agreement giving up my right to an undiscounted pension which may be otherwise payable on my redundancy. (Due to my length of service, I still have a final salary pension). I have not been given a reason why I have had to sign this other than 'it's policy'.

I was hoping to take Early Retirement but the minimum pension age is 55 now. None of my other colleagues have been given this agreement as far as I know but it could be they are either no longer in the final salary scheme or are over 55.

I wondered of anyone had thoughts on :-

a) Should I have been offered Independent Legal Advice as I have been given an agreement to sign?

b) The implications if I don't sign the agreement - could they make me take another job elsewhere?

c) Even though they are not offering me Early Retirement, could there be this option open in view of the wording the agreement?

Any thoughts on this would be welcome.

Hello and welcome to CAG.

Others know about the pension aspects, but I didn't think they could force you to give up your pension like that. Obviously the money matters to you.

Try speaking to TPAS, the pension advisory service, they have a good helpline.

Best, HB

Do not sign without taking legal advice! Arrange to see a solicitor today. My reading is that the the company is trying to use the enhanced VR to buy you out now (for a fixed sum) of a potential unknown future liability to them (the undiscounted pension). I'm pretty sure they can't force you to give up your pension but they could withdraw the enhanced VR if you don't agree and just offer you the statutory minimum redundancy. Unless there is already something in your contract that commits them to offering more than the statutory minimum redundancy - check that before you see a solicitor.

I would have thought that legally this is a Settlement Agreement, in which case you must have independent legal advice before you sign it, from a solicitor of your choosing but paid for by your employer.

Do some back-of-envelope calculations on what the enhanced VR is worth compared to statutory redundancy. Statutory redundancy rates on gov.uk - note the weekly maximum as well as the number of weeks limit. And can you estimate what the undiscounted pension is worth to you? I presume it's just the ability to take an early pension undiscounted that you are being invited to give up, not the whole pension.

Thanks for the replies Honeybee & Ethel Street. Glad I posted this as you have helped already & certainly confirmed my thoughts.

Unfortunately, I have already signed the agreement, the reason being I did not want to re-apply for my role along with others in my position which would mean I would be under more stress. I also need to mention I have a mental disability which I have made known to my employer and in all honesty I don’t think I would cope with the added pressure . In any event, my area manager told me at a later date I would not have got the job anyway as I was not the best candidate so I would have been made compulsory redundant anyway, in which case there would have been no agreement to sign.

Part of the reason I am writing this now for help is is I have put in a grievance & I have a meeting tomorrow with my employer so I want to make sure I put in a good case. I have already put in a complaint to the pension scheme administrator but I will not get the outcome until after I have left employment which will be too late.

Two areas I intend to raise are a) the fact I wasn’t offered legal advice & therefore the agreement cannot be binding and b) I withdrew my VR applications week after the closing date as I believed I was entitled to Early Retirement as a further option. I was told I was within timescale to do this verbally but I heard nothing more about it.

To clarify, I am giving up the undiscounted pension until I am 60, when my pension is paid. The difference between the enhanced VR package and being able to take the pension is over £120k so a huge difference (assuming I live until 60 !)

In addition, I will have the comfort of a monthly pension I can afford to live off. Due to my disability, I think it will be hard to find a job that I can do at a reasonable wage to support my wife and 2 children, so it will take the pressure off immensely and will give me the chance to try and get better.

you have just cost yourself your pemsion rights for the next 15 years. In many schemes when a person is made compulsarily redundant the company has to keep paying into the pension scheme until your normal retirement date. thsi is normally doe by way of a lump sum to make up the amount rther than on a monthly basis and this would have given you another 15 years contributions inot the scheme so you pension would have been nearly twice as big as it will now be and also inflation will have been taken care of wheras you pension will now be frozen at todays rates.

Yes, they should have told you to seek legal advice, most employers will pay a nominal £100 or so towards the cost of that as well because it is cheaper in the long run than being on the losing end of a pensions claim in a few years time.

they are laughing all the way to the bank over this.

Contact the pensions Advisory Service to see if they have breached any regulation that will allow you to undo this. You may well end up with less redundancy pay but so what, you can get another job but you will never get this money back otherwise.

If I were you I would be asking for the grievance hearing to be postponed to enable me to take legal advice and I would arrange an appointment with an employment solicitor asap. Amongst other issues I would discuss with the solicitor would be whether this was a Settlement Agreement and so invalid without legal advice and whether the company had acted improperly in relation to your mental health disability under the Equality Act. I can't say what the answers are, you need professional legal advice.