19.04.2024
Each year we update our actuarial factors to make sure they’re actuarially equivalent, so the cost to us of providing each member's compensation is the same regardless of the choices they make. We take into account external influences, such as movements in financial markets and changes to life expectancy.
We’ve now completed the annual review of our factors and have had to make some changes that will affect members who choose to retire on or after 1 October 2022.
Who do these changes affect?
If you plan to take a tax-free cash lump sum and start your payments at your scheme’s normal pension age, the new factors will result in a smaller lump sum for the same amount of annual compensation given up.
If you plan to take early or late retirement, the new factors will result in a higher level of compensation each year than would be calculated using the current factors.
If you plan to take a lump sum alongside early or late retirement, the situation is more complicated, because the new factors are less generous for lump sums, and more generous for early and late retirement.
You’ll need to consider your individual circumstances to decide whether you should retire before or after the new factors come into effect.
To help you understand your options, if you are 55 or over, you can use our online service ‘Quote and Retire’ to see your potential levels of compensation under the new and existing factors. This service will help you explore how your cash lump sum and ongoing payments may change if you decide to retire before or after 1 October, as you can see a quote for a retirement date up to three months in advance. You can also use this service to complete your retirement without having to return any paper forms.
Select ‘Quote & Retire’ from the ‘My Compensation’ menu, which can be found in the main menu bar above, if this applies to you.
Please be aware that our separate online tool, the ‘Benefit Modeller’, will continue to use the current factors until 1 October 2022 and should not be used to compare how your benefits could change based on the date you’re thinking of retiring.
If you’re retiring before 1 October 2022, the final calculation will be done using the previous factors.
Members who have fully retired and members of the Financial Assistance Scheme (FAS) won’t be affected.
Find out more
If you’re a member, please log into the member site for more information about how the new factors affect you.
