Factors Guidance Hub

This guidance is provided for the use of the Scottish Public Pensions Agency (SPPA) as administrator of the NHS Pension Scheme (Scotland) 2015 ('NHSPSS 2015') and sets out how to determine the appropriate reduction or uplift to be applied to a member's benefits when retiring voluntarily in normal health either prior to or later than Normal Pension Age (NPA).

For this purpose, NPA is equal to a member's State Pension Age (SPA), minimum age 65, as specified in legislation at the date of the member's retirement.

This principle also applies for Additional Pension (AP) contracts (with AP pro-rated in respect of any unpaid contributions) even where a different NPA (PNPA - prospective normal pension age, subject to a minimum of age 65) has been assumed for the purposes of setting the cost of the contract (which is linked to expected NPA at the time contributions are paid as set out in stated Government policy).

In some cases a modified NPA (RRA - see 'NHS Pension Scheme (Scotland) 2015: Early Retirement Reduction Buy-Out' guidance) should be used to determine the factor applicable to some or all benefits:

For a member with an Early Retirement Reduction Buy-Out (ERRBO) agreement, the factor(s) applied to benefits accrued during the term of the agreement should be determined based on the member's Reduced Retirement Age(s) (RRA) as determined at the date of retirement. For the purposes of this guidance RRA is determined based on NPA as specified in legislation at the date of the member's retirement less the period of reduction secured by the agreement. Note this may be different to RRA as determined for the purposes of setting the cost of the agreement (which is linked to PNPA, minimum age 65, as set out in stated Government policy).

More details are given later in the guidance.

The following changes have been made when reviewing this guidance:

Important information around the expected audience for the guidance, use of the guidance, review of factors, compliance and limitations applies across all sets of guidance. Rather than being repeated in each set of guidance, this can now be found on the scheme home page. It is important to read this information alongside the guidance.
Calculation methodology: No changes have been made to the calculation methodology.
Examples: There are no examples in this guidance. Worked examples, using the calculation methodology, can be found in prior versions of the guidance (though please note that these use historic factors).
Factor tables: The "Factor Tables" tab contains the names of the tables that are referenced in the calculation methodology. The tables of factors themselves can be found in the most recently published "Consolidated Factors Workbook" which is available by clicking the "Download current Consolidated Factors Workbook" button on the scheme's home page.
Assumptions: The key assumptions underlying the factors in each note are contained in the Consolidated Factors Workbook.
Regulations: The regulations that require the production of the actuarial factors and/or guidance that is the subject of this note are summarised in the "Regulations" tab.

This guidance is not relevant for benefits payable from the National Health Service Superannuation Scheme for Scotland (NHSSS). If members have accrued pension in both the NHSPSS 2015 and NHSSS, then these benefits should be treated separately, in accordance with the relevant guidance.