Work and draw pension

Organisations are facing up to the need to introduce flexible retirement processes before the advent of A-Day. Amanda Cullen, a council member of the independent industry body the Pensions Management Institute, said that the trend for bridging the gap between working and retirement is set to pick up speed after pensions simplification. Under the new rules staff will be able to work part-time for an employer while drawing a pension from the same organisation. "You won’t have to suddenly switch off your working life and switch on your retirement life. You will be able to move from 100% salary over a period of time." Under current rules, workers cannot draw a pension from their current employer, even if they are working part-time. In order to access the funds, they must either retire or switch organisations so they can draw a company pension from their previous employer’s pension fund. This means flexible retirees can find their income falls short. "In the future they will be allowed to take some, but not all, of their pension to start to fill that gap. For example, someone could work 80% of a full-time job and draw 20% of their pension." She concluded that market pressures will force organisations to review their policies carefully.