The calculations below are appropriate for members subject to benefit reduction due to AA charges retiring on grounds of ill-health.
The factors used for the calculations are in Table 604 in the consolidated factors workbook.
The appropriate factor will depend on the member's age (last birthday) at their date of retirement.
The steps necessary to calculate a benefit reduction for members retiring in ill-health are described below.
The pension debits should be applied to the (enhanced) main scheme benefits. The debits should be applied to benefits before member options are exercised, e.g. commutation.
Amounts at retirement | Notation |
Total DC Pot | DC |
Main Scheme Ill-health Pension | IHP |
Dependant's Pension | DP |
Member Pension Debit | PD |
Net Main Scheme Ill-health Pension | NIHP |
Net Dependant's Pension | NDP |
Step | Item | Calculation |
1 | PD | = DC / (Relevant Factor from Table 604 in the consolidated factors workbook) |
Net Benefits Payable on ill-health retirement: | ||
2 | ||
a) | NIHRP | = IHRP - PD |
b) | NDP | = DP |
