Members of nuvos who continue in active service after their NPA will have their benefits increased for late payment. This is done by an 'age addition' that is added to the member's account on each scheme anniversary (1 April) where the member remains in active service after NPA. An age addition (assumed age addition) is also awarded on the date that the member leaves active service, where this is after NPA.
In order to calculate the appropriate age addition for a scheme year, a percentage is applied to the 'opening balance' of the relevant description of accrued pension for the previous scheme year.
Where the age addition is awarded on a date other than a scheme anniversary (i.e. because they have left active service during a scheme year), the (assumed) age addition should be the amount which would have been awarded at the following scheme anniversary, allowing for the proportion of the scheme year that the member was an active member who had reached NPA. Therefore, the 'opening balance for the previous scheme year' referred to above is actually the opening balance for the current scheme year.
For example, to calculate an age addition to be applied on 1 April 2025 a percentage is applied to the opening balance of pension for the year 2024-25, not the opening balance for the year 2025-26. The opening balance for 2024-25 can be thought of as the balance at 31 March 2024.
An age addition awarded on 25 July 2025 would be calculated by applying a percentage to the opening balance of pension for the year 2025-26.
The 'opening balance' is as defined in the nuvos scheme rules. We understand that the opening balance on a given scheme anniversary includes the opening balance at the previous scheme anniversary, indexation on the opening balance (at the previous scheme anniversary), earned pension applicable over the previous scheme year and any age addition awarded on the previous scheme anniversary.
The appropriate percentage to apply to the opening balance of the previous scheme year is determined, based on the member's age (last birthday) at the date the age addition is awarded and the period of time that the member has been active and over NPA during the scheme year. These factors are in table P1AANUV.
For the initial age addition (e.g. the first scheme anniversary reached past NPA) the appropriate increase is 1/12th of the full year's increase for each complete month between NPA and the relevant scheme anniversary. Part months can be ignored.
The age addition can be summarised as follows:
Age addition = (Opening balance for previous scheme year) x [(m / 12) x Factor]
[The assumed age addition is applied to the opening balance for the current scheme year.]
Where:
m is the number of complete months during the previous scheme year where the member was in active service and over NPA.
Factor is calculated using table P1AANUV.
The following points should be noted:
- Age additions are calculated before the commutation option is exercised.
- The age additions applied to the member's pension should also apply to the contingent partner's pension (where one is payable).
Our understanding is that Pension Credit pensions should not receive any increase on late retirement.
Our understanding is that Pension Debit pensions should be treated in the same way as a deferred member's pension. Therefore, on late retirement they should be increased by a late payment supplement, not an age addition. Please refer to Late payment supplements - nuvos scheme section.
This note does not cover the adjustments to apply to scheme pays debits on early or late retirement. Please refer to separate guidance on scheme pays debits.
Added pension for nuvos members in service should receive age additions as described above.
