A Waiting Game

Following a week of "should I or shouldn't I" angst over my pension transfer, complete with much working out of whether I could manage to leave the pension intact (should I decide it's a good idea to do so) and still retire at 58, my manager dropped a quiet bombshell at the end of last week. Apparently "letters" will be issued by the end of the month.

By this we took him to mean that redundancies of some flavour are back on the menu. There has been much speculation and rumour on the subject for the last 18 months or so. (See here , here and here) with the latest "update" a couple of months ago being that there was to be no redundancy offer in our section due to the high number of contractors we still employ. Apparently so long as there are contractors in post, permanent members of staff cannot be made redundant despite the fact that the work done by the contractors is in a specific role for which none of us are trained, and at a lower level than we are currently employed. Apparently management have now found a way round this, maybe by shuffling people around departments as they're deeply immersed in a transformation exercise at the moment. ("Transformation" being the word you use when you want to find a way of getting the same amount of work done by half the number of people :-))

I had put the possibility of voluntary (or compulsory) redundancy and how it could work for me to the back of my mind but as it might now come back to the forefront, I don't feel equipped to make any type of decision on my pension. The "Welcome" pack from Fidelity is sitting, unopened, on the shelf.

If I'm made redundant I would get immediate access to my LGPS pension, unreduced. There would be no pressing need for me to have access to the £20,000 in the FSAVC over the next couple of years (although it may still be desirable).

So, many thanks to all who left very useful comments on my last post but for the moment I'm going to park it and wait to see what the end of the month brings. Fingers crossed I either get my marching orders or can apply to be given them :-)

Having My Hand Forced... Probably a Good Thing?

Virtually as soon as the election result came in the managers in my section issued invitations to 1-1 sessions with all staff above a certain grade and announced the fact that we are to be offered Voluntary Redundancy in the summer to take effect from April 2016.

It has been on the cards for some time . We have been steadily bleeding staff for several years and yet more savings need to be made in order to accommodate the next round of government spending cuts. Given the fact that this government now has an overall majority there is also a strong likelihood of privatisation and/or outsourcing of services.

In order to keep a basic level of service going, front-line staff who deal directly with the public, are being protected as much as possible from the cuts, although there has been a significant drop in numbers here too. This means that those of us who look after the infrastructure are being targeted.

Don't get me wrong, it would probably be a blessing for me personally to be accepted for VR. In the past people over 55 have been given the chance to choose to go as part of "efficiency savings" rather than be made redundant, which means that they have been given access to their pension immediately and without reduction. This would be an absolute godsend to me as I would receive my pension, as accrued up to date (around £8,500 pa) from next April. Happy days :-). However there is some doubt that the same rules will apply this time round as letting people have their pensions early is very expensive when compared to making them redundant.

We are currently waiting to find out what the terms of the offer will be, but in the meantime I am left with a bit of a dilemma. If I am offered the the redundancy pay only and no pension would I accept? My redundancy payment comes in at around £20,000 but taking it would mean that I would not get that final year of work which adds £500 extra to my pension for life. I'm still running the numbers and going back through the calculations I did last Oct, with the added complication that I've now decided to take my LGPS pension early. At the forefront of my mind is the vision of what working in my small section would be like, given that we are due to lose half the senior staff. That level of stress is not attractive at all. I think I'll be able to find the money somehow :-)

Of course I may not get accepted for VR if there are "cheaper" people who would like to go, or if it's considered too much of a risk to lose me. On the other hand I may get sent down the path of compulsory redundancy anyway if not enough people take up the offer. The next few months will tell. I will certainly feel much happier when I know exactly where I stand. The uncertainty doesn't help my financial planning though, specifically around the choice of funding AVC's as against SIPP. Watch this space.