Where a member has more than one contract (to purchase AP) then each contract must be treated separately for the purposes of making calculations under this guidance.

Where a member who originally elected to purchase AP by monthly contributions stops contributions before the end of the payment period or there is a lapse in the payment of contributions, the member will be credited with an amount of the AP having regard to the contributions paid.

Contributions could stop before the end of the payment period for any of the following reasons:

• the member revoking the election,
• the member leaving pensionable employment,
• the member having become entitled to retirement benefits, or
• the member having made an election to take phased retirement.

To calculate the paid-up AP credit for such a member who ceased contributions before completing their AP payment period, the following general formula should be used:

Credit = (P/R) x £250

Where:

P = amount of monthly contributions in respect of member's original election (for AP amount initially purchased - not for £250 pa only)

R = monthly contribution per £250 AP at date of original election payable over actual payment period to date of cessation

The amounts calculated in P and R should be based on the member's age last birthday at the date of the original election, using Tables x-704 to x-707 (for regular contribution elections made after 31 March 2011) or Tables x-708 to x-711 (for regular contribution elections made on or before 31 March 2011), as appropriate. These tables should be used irrespective of the actual amounts of monthly contribution paid by the member.

Where the actual payment period is not a whole number of years, a credit is calculated for the actual payment period rounded down to the nearest year. A further credit is calculated for the actual payment period rounded up to the nearest year. These figures are interpolated based on the exact payment period (in months) to obtain the paid-up credit.

The paid-up AP credit is as at the date of original election. The credit will increase in line with either the Consumer Prices Index or the Retail Prices Index, depending on when the AP contract was taken out, before it comes into payment (in the normal way for AP), and in line with the Consumer Prices Index after it comes into payment.

Where a member has an election with a gap in AP contributions and continuation of the original contract is possible under the scheme regulations a different calculation is required. (For any other case not covered by the scheme regulations, a lapse in contributions cannot occur as any missed contribution payments will trigger a cessation of contributions with no option to resume contributions at a later date. In this case, the credit calculation set out above will be relevant.)

For calculating the AP credit for such a member who has a lapse in contributions as covered by the scheme regulations, the following general formula should be used:

Credit = ((P / R) x £250) + (T - ((P / S) x £250))

Where:

P = amount of monthly contribution in respect of member's original election (for AP amount initially purchased - not for £250 pa only)

R = monthly contribution per £250 AP over the period from original election to the start of the lapse

T = amount of AP to be purchased according to original election

S = monthly contribution per £250 AP over the period from original election to the end of the lapse

The amounts calculated in P, R and S should be based on the member's age last birthday at the date of the original election, using Tables x-704 to x-707 (for regular contribution elections made after 31 March 2011) or Tables x-708 to x-711 (for regular contribution elections made on or before 31 March 2011), as appropriate. These tables should be used irrespective of the actual amounts of monthly contribution paid by the member.

Where the payment period duration underlying R is not a whole number of years, then ((P / R) x £250) should be calculated with the duration rounded down to the nearest year, and then calculated with the payment period rounded up to the nearest year. The actual value of ((P/R) x £250) will then be the interpolation of these two calculations for the exact lapse period (in months). The same applies for ((P / S) x £250) where S is not a whole number of years.

Where a member has more than one lapse, these cases are not covered by this guidance.