This guidance is addressed to the Cabinet Office as scheme manager of the Principal Civil Service Pension Scheme (PCSPS or the Scheme).

The purpose is to provide Cabinet Office with the method to be used to calculate the cost of buying out the full actuarial reduction for members wishing to retire before age 55 whose deemed date for pension increases occurs before the date of early retirement.

Scheme members who are eligible to take actuarially reduced early retirement have the option to pay a lump sum to the scheme and then receive an unreduced pension and lump sum.

We have provided a pro forma in Pro forma for calculations, which can be used to calculate the actuarial reduction buy out cost.

In the remainder of this guidance, the lump sum payment required to buy out the actuarial reduction is referred to as the actuarial reduction buy out (ARBO) cost. The ARBO cost should be calculated before the member commutes pension for lump sum and before offsetting any divorce or scheme pays debits.

The ARBO cost for added pensions will be calculated in the same way (and using the same factor tables) as for main scheme benefits.

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.

For cases involving members wishing to retire after age 55 or before age 55 whose deemed date for pension increases occurs on or after the date of early retirement, please see the separate PCSPS guidance for such cases.

We understand that nuvos members can only take early retirement (in normal health) at or above age 55. Therefore this guidance will not apply to members of nuvos.

Calculations for members whose NPA is not age 60 or 65 years should be referred to the Government Actuary's Department (GAD).

We do not anticipate any other special cases not covered by this guidance. However, if any do occur they should be referred to GAD.