This guidance is addressed to the Department of Finance (DoF) as scheme manager of the Civil Service and Others Pension Scheme (Northern Ireland) (CSOPS(NI) or the alpha scheme).
The purpose is to provide DoF with guidance on how to apply Late Payment Supplement (LPS) factors to members' benefits.
A LPS is applied to the pension of deferred members who don't begin receiving their pension until after their Normal Pension Age (NPA)/Effective Pension Age (EPA). Normal pension age is defined as a member's state pension age (or 65, if that is higher) in the alpha section. For the purpose of this guidance, a member's expected NPA in the alpha section is the same as their state pension age as defined by legislation at the point when benefits are paid.
LPS factors are different from 'Age Addition' factors, which are used to increase the benefits of members who continue in active service after their NPA/EPA. Age Addition factors are the subject of separate guidance.
The LPS is calculated as a one-off calculation at the point of retirement. This is different to the approach used for Age Addition, where an Age Addition is calculated in each scheme year in which the member is still active after NPA/EPA.
This guidance only relates to benefits in the alpha scheme. Benefits in the Classic, Premium, Nuvos or Classic Plus schemes should be treated separately, in accordance with the relevant guidance for those schemes.
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.
The guidance describes how LPS factors should be applied and reflect our understanding of the way that administration systems have been programmed to calculate LPSs.
