A late payment supplement (LPS) is awarded as an increase to the benefits of deferred members of the nuvos scheme who retire after their NPA.

The LPS is awarded as a one-off increase on the date of the member's retirement. This differs from age additions, which are awarded each year that the member remains in active service after NPA.

The LPS is calculated by multiplying the pension at retirement by the appropriate percentage based on the number of years that the member was in deferment and over NPA. The appropriate percentage is based on Table P1LPSNUV.

For part years, the calculation uses a member's age in complete years and months when the member retires. Part months can be ignored.

The late payment supplement (LPS) can be summarised as follows:

LPS = (Pension at retirement) x [(1 + F₆₅)^(r/12) x (1 + F₇₀)^(s/12) x (1 + F₇₆)^(t/12) - 1]

Where:

Pension at retirement is the pension before pension increases

F₆₅ is the factor applying from age 65 to 69, as taken from Table P1LPSNUV

F₇₀ is the factor applying from age 70 to 75, as taken from Table P1LPSNUV

F₇₆ is the factor applying for age 76 and over, as taken from Table P1LPSNUV

r is the number of complete months where the following was true of the relevant member:

• deferred member of the scheme
• over NPA
• aged between 65 and 69 (age last birthday in years)

s is the number of complete months where the following was true of the relevant member:

• deferred member of the scheme
• over NPA
• between 70 and 75 (age last birthday in years)

t is the number of complete months where the following was true of the relevant member:

• deferred member of the scheme
• over NPA
• aged 76 or over (age last birthday in years)

The following points should be noted:

• A late payment supplement is calculated before the commutation option is exercised.
• A late payment supplement 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, they should be increased for late payment supplements using the method described above.

This guidance does not cover the adjustments to apply to scheme pays debits on early or late retirement. Please refer to the separate guidance on scheme pays debits.

Added pension for nuvos members in deferment should receive late payment supplements using the methodology described above.