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.

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 Calculation of the pension and lump sum offset at the Calculation Date and Adjusting benefit offsets at retirement. Any backpay for the period between retirement and payment should make allowance for the pension offset 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 is the Annual Allowance tax charge that the member has notified the scheme that they wish to meet via the scheme pays mechanism.

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

• Table D1 (Table 1-612 of the Consolidated Factors Workbook) if the member retired in normal health.
• Table D2 (Table 1-613 of the Consolidated Factors Workbook) 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, classic plus, premium 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).