This note is provided for the Ministry of Defence (MoD) as scheme manager of the Armed Forces pension arrangements and sets out factors for the calculation of the lump sum due on the commutation of a small pension ("trivial commutation") and the accompanying guidance to demonstrate how these factors should be applied to determine the lump sum.
This guidance note covers trivial commutation for eligible members of AFPS15, AFPS05, AFPS75, Reserve Forces Pension Scheme (RFPS05), Full Time Reserve Service Pension Scheme (FTRS PS) and Non-Regular Permanent Staff Pension Scheme (NRPSPS).
The tables for use in trivial commutation cases are tables 601 and 602 in the Consolidated Factors Workbook.
These factors are "GAD-Controlled" factors and so these factors came into force with effect from the date provided to administrators.
The following changes have been made when reviewing this guidance:
- Important information around the expected audience for the guidance, use of the guidance, review of factors, compliance and limitations applies across all sets of guidance. Rather than being repeated in each set of guidance, this can now be found on the scheme home page. It is important to read this information alongside the guidance.
- Calculation methodology: No changes have been made to the calculation methodology.
- Examples: There are no examples in this guidance. Worked examples, using the calculation methodology, can be found in prior versions of the guidance (though please note that these use historic factors).
- Factor tables: The "Factor Tables" tab contains the names of the tables that are referenced in the calculation methodology. The tables of factors themselves can be found in the most recently published "Consolidated Factors Workbook" which is available by clicking the "Download current Consolidated Factors Workbook" button on the scheme's home page.
- Assumptions: The key assumptions underlying the factors in each note are contained in the Consolidated Factors Workbook.
- Regulations: The regulations that require the production of the actuarial factors and/or guidance that is the subject of this note are summarised in the "Regulations" tab.
