Various restrictions on lump sum payments are imposed by HMRC. Prior to 5 April 2011, lump sum payments to members over age 75 were deemed unauthorised, however, from 5 April 2011, HMRC no longer classes such payments as unauthorised.

The scheme regulations, however, states that members who reached age 75 before 5 April 2011 cannot take their lump sum and must convert it into additional pension. In practice, for those members in NHS employment, a pension and lump sum automatically go into payment at age 75, regardless of whether the member continues in employment. This regulation therefore only applies to deferred members who meet the age criterion and whose benefits have not yet been put into payment. In reality, the number of these types of 'lost' deferred members is likely to be very small.

The annual pension amount payable in respect of conversion of a lump sum (in addition to any other pension in payment) should be determined as follows:

Pension = Lump sum amount / Factor

Where:

Lump sum amount is the amount that would otherwise be payable to the member if the lump sum is not required to be converted into additional pension.

Factor should be taken from Table 504 of the consolidated factor spreadsheet as applicable for the member's age (last birthday).

The factors are based on a single life pension (with no guarantee period). This means there will be no adjustment required to any dependants' benefits payable following the member's death.