At any given time, the total amount of accrued AP in a member's pension account cannot exceed the overall limit of added pension set out in the scheme regulations.

The maximum overall limit of added pension was £6,500 per annum for the 2015-16 financial year. The limit will change in accordance with the scheme regulations in subsequent years.

When a member makes an AP election, a check needs to be carried out to ensure the member has enough headroom within the overall extra pension limit to purchase the desired amount of AP. The amount of pension from this election to count against the overall limit will simply be the amount of AP the member has elected to purchase.

If the member has previously made an AP election, the amount of pension from any earlier AP elections to count against the extra pension limit will be the amount of AP the member has elected to purchase, or the paid-up credit, increased in line with inflation to the date of the new election.

The following formula should be used to calculate the maximum lump sum payment a member can make to purchase AP.

Maximum lump sum payment = H x F

Where:

H = the available headroom under the overall limit of added pension

F = factor for AP elections (see Tables x-406 and x-407)

The available headroom under the overall limit of added pension can be calculated as the overall limit of added pension at the time of the election minus the total amount of AP credit within the member's pension account at the time of the election.

Factors for calculating the maximum lump sum payment amount should be selected with reference to;

• the member's age (last birthday) at the start of the scheme year;
• whether dependant's benefits have been purchased; and
• the member's gender, if the AP to be purchased is 'self only AP'.

The overall limit of added pension also applies to periodic payment elections. However, it is not possible to determine at the time of the election the exact amount of periodic payments permissible under the limit, where these fall in multiple scheme years. Each year the scheme manager should check that the total added pension credited to the member's pension account does not exceed the overall limit of added pension and, if it does, act in accordance with the scheme regulations (cancellation of contract and refund of contributions as required).