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 calculate the cost of buying out the full actuarial reduction that will apply to a member who wishes to take their pension benefits in the alpha scheme before pension age.

Alpha 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.

This guidance does not apply to benefits in the classic, classic plus, premium or nuvos sections of the Principal Civil Service Pension Scheme (Northern Ireland) (PCSPS(NI)). Separate guidance can be found in the actuarial reduction buy out guidance for the PCSPS(NI).

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.

Any special cases that are not covered by this guidance should be treated on a case by case basis.

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.