Our understanding is that where members have already had their benefits put into payment, the scheme is not obliged to offer the option of scheme pays on a mandatory basis but can offer it on a voluntary basis. Cabinet Office has requested that GAD provide guidance on how the scheme pays offset should be calculated for such cases.

Where the member has retired before the Calculation Date but their benefits are not yet in payment when they request scheme pays, the offset should be calculated as set out in Adjusting pension offsets at retirement.

Where the member has already retired and their benefits are in payment by the Calculation Date, the offset should be calculated as follows:

Pension offset = AATAX / AAFAC

Where:

AATAX = the Annual Allowance tax charge that the member has notified the scheme that they wish to meet via the scheme pays mechanism.

AAFAC = the pensioner member's scheme pays factor taken from:

• Table D1 if the member retired in normal health.
• Table D2 if the member retired in ill health.

The appropriate factor depends on the member's gender and age at the Calculation Date. The same factors are used for classic, premium, classic plus and nuvos members, regardless of the member's NPA.

For the avoidance of doubt, the member's age at the calculation date, not their age at retirement, should be used to calculate the pension offset. The pension offset should not be backdated to the member's retirement date and there should be no lump sum offset for classic members (since the member will have already received their lump sum).