To think it's completely wrong to select someone for redundancy with less than 3 years to go til full Pension

[LaurieFairyCake]

As you just know they're doing it (no matter what bullshit reason they give) to save hundreds of thousands of pounds.

I can't believe someone can give 35 years of their life to one company and be made redundant the year before so they lose full pension

"A bit like compound interest where it's a sudden jump at 35 years. It's not equal, the last year is worth 8 times more than the previous year iyswim"
I have never heard of a pension scheme working this way! Any pension I've been part of, every working year was the same, qualifying you for e.g. 1/40th final salary.

Is the person involved in a union? Could the pension scheme rules be challenged under e.g. Unfair Contract Terms? Have they taken any legal advice (union should be first people to ask.)

As others have said, the big drop doesn't make much sense. I used to work for a large financial services company and whenever a redundancy programme came round, those with long service and close to retirement were praying there would be a voluntary element. The payout would compensate for the loss of service to the pension scheme and they would get to retire early.

If you can get any other detail about how the scheme works (I.e. Then acrual rate) post it and hopefully someone from the industry will be able to spot if there's anything dodgy.

Actually, to be entirely fair, all the pensions described so far are defined benefit schemes - and it's absolutely right that each year is equally weighted.

There are also defined contribution schemes. They are often established so that employers are obliged to contribute more for older employees (oftentimes the employees themselves are also required to match the employer contributions). But the reason for this is to reflect the fact that £1 contributed into the pension scheme of an 18 year old is worth many, many times more than £1 contributed into the pension scheme of a 63 year old. (Because the £1 for the 18 year old should be invested and multiplied many times over.)

It is absolutely not the case that someone retiring from a defined contribution scheme should see their pension entitlement cut by 40% purely as a result of the redundancy and the 'lost' employer contributions.

Crap, I can't spell accrual.

There is case law that suggests cost is a legitimate business reason to select someone for redundancy and if older people cost more an indirect age discrimination claim may not apply.

But as pp said, it's jobs that are made redundant, not people so yabu.