AP can be purchased either by payment of a lump sum or by regular monthly contributions over a pre-specified term. AP may be secured by payment by either the member or his or her employer; where the employer pays, the cost must be met by a lump sum payment. More than one election to secure AP may be accepted. Where a member elects to purchase AP by way of regular contributions this period must be a period of whole years between 1 and 20 and must not extend beyond Normal Pension Age (NPA).

Members can purchase AP which provides only for additional member's pension or which provides for both additional member's pension and additional survivor's pension. If additional survivor pension is secured the amount payable is 37.5% of the member's AP. If the member dies, becomes eligibile for an ill-health pension or otherwise leaves pensionable service without entitlement to a deferred or immediate pension entitlement within one year of election to secure AP, all AP contributions linked to that election paid must be refunded and the entitlement to AP lapses.

The amount of Additional Pension available to purchase was subject to a maximum of £6,500 pa for the 2015-16 scheme year under the scheme regulations and is expected to be adjusted annually by HM Treasury. In the absence of a HM Treasury published limit, Pensions (Increase) Act 1971 increases will be applied to the prior year limit. Any Early Retirement Reduction Buy Out (ERRBO) agreements entered into will count towards this maximum. No election to secure AP may be accepted if it would result in the aggregate of all AP and any existing ERRBO agreement exceeding maximum limits. Calculating the headroom for purchase of AP is given in Limits on the purchase of Additional Pension.

AP secured in the NHSPSS legacy schemes do not count towards the maximum.

This guidance should be used for all requests for AP agreements. The earliest date for commencement of an agreement is 1 April 2015.

AP may be purchased in multiples of £250 pa. The costs shown in this note are per £250 pa of AP purchased. AP is payable from a member's NPA as set out in legislation at the date of the member's retirement. If the member chooses to retire early or late, AP will be subject to an early or late retirement adjustment. See the actuarial guidance for early and late retirement for more detail.

The AP costs have been provided by reference to the member's age last birthday at the date of election. The single premium costs are rounded to the nearest £10 and the monthly contributions to the nearest £0.10.

Generally, factors for calculating the cost to a member of AP should be selected with reference to the

• age (last birthday) at date of start of agreement;
• type of AP (member-only or with attaching survivor's benefits);
• Prospective Normal Pension Age (PNPA, minimum age 65) as specified in stated Government policy at date of election. Factors for members with non-integer PNPA should be obtained by interpolation of the factors for the higher and lower PNPAs; and
• chosen form of payment (either lump sum or regular contributions).

Where the AP is not purchased by a lump sum, factors must additionally be chosen with reference to the period of contributions as at the election date (between 1 year and 20 years).

AP will increase in line with Consumer Prices Index (CPI) before and after coming into payment.

AP is priced based on stated Government policy on State Pension Age (SPA) (ie PNPA). AP is available unreduced from the member's actual NPA which may differ from PNPA. Both NPA and PNPA may change between an AP election and the benefit coming into payment. Changes in PNPA are likely to result in a reassessment of contributions required. This will affect outstanding periodic payments only. No adjustments will be made to prior contributions to reflect any changes in assumed NPA. Periodic payments cease at the agreed end date.