The regulations allow for employer costs to be paid as a single payment made within one month of the date on which the pensions became payable or, if Scottish Ministers agree, by not more than 5 equal annual instalments, the first of which is to be paid within one month of the date on which the pensions became payable and the others by 31 October in each of the following 4 financial/scheme years.

The formulae and the factors in the other sections of this guidance are to calculate the single lump sum payment due. However, the single lump sum amount can be converted to 5 annual instalments using the following factor:

Each annual instalment = Total single capitalised employer cost x Spr

where:

Spr = spread factor which can be found in the Consolidated Factors Workbook

In certain cases, the Employing Authority may have chosen to make ongoing quarterly payments to cover the cost of a member's service enhancement on redundancy. This only applies to members of the 1995 section.

Regulations allow an Employing Authority making quarterly contributions to capitalise its future payments into a single payment (or up to 5 annual payments) at any time whilst the redundancy benefits are in payment. Factors are provided in table CER2 and CER5 for this purpose but are only applicable for redundancies that occurred before October 2011.

The member's pension due to any enhancement at the date of capitalisation should be multiplied by the relevant factor for their age at capitalisation to calculate the single payment payable. The formulae in the Spreading costs over five annual instalments section above can be used to split this payment into 5 annual payments if required.

If an Employing Authority wishes to capitalise costs after the point of redundancy where the member retired after October 2011, please request factors from GAD.