Eli Lilly has decided not to introduce provisions for flexible retirement following a review of its defined benefits pension scheme in the run up to pensions tax simplification. The Finance Act 2004 provides for employers and schemes to offer the opportunity to members to take pension benefits after the age of 55 years even if they are still carrying on working for the same employer. But the company has decided to lift the cap on AVC contributions after A-day so that employees can take advantage of the annual allowance on saving.
Julie Osman, director of benefits and pensions at Eli Lilly, said: "This is probably similar to a lot of other companies. We are offering the flexibility around saving in cash, but we are not offering the flexible retirement." She added that the company already offers a full range of flexible work programmes and the opportunity to save down to retirement. Flexible retirement she said could "come back on the cards at a later date".
Employees who are approaching the limit on the new taxation allowances have also been given access to financial advice. And group sessions have been held for those impacted by changes to the pension retirement age. The Finance Act provides that the earliest age at which pensions may be taken will be 55 years by 2010.
Historically, Eli Lilly employees have been able to accumulate points on age, plus years, plus service making them eligible for early retirement from 50 years. But in time Eli Lilly’s scheme will be amended to comply with the Finance Act.