Special severance pay

There has been a recent update to the statutory guidance on special severance payments from LGPS England.

What are special severance payments? 

A Special Severance Payment (SSP), is payment that is made to an employee when they leave employment, which is outside of their normal statutory of contractual requirements.

The guidance confirms that:

  • When a pension strain happens due to the employer awarding added pension (employer funded APC’s), could be seen as a special severance payment.
  • Where an employer chooses to waive reductions, (depending on the terms of the contract), this could be considered as a special severance payment.

Where a pension strain is under flexible, redundancy or efficiency retirement, this does not constitute as a special severance payment.

More details about the update to this guidance can be found on the LGPS regulations website here.

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