This note is provided for the Department of Justice (DoJ) as the responsible authority for the police pension schemes in Northern Ireland, and in our capacity as scheme actuary. This note relates to the 2015 Scheme only (it does not apply to the 1988 or 2006 schemes) and its purpose is to set out how the maximum limit for commutation should be calculated.

This note contains tables which can be used by the administrators to determine the maximum proportion of 2015 Scheme pension which can be commuted at retirement.

The Police Pensions Regulations (Northern Ireland) 2015 ('Option to commute part of pension') sets out three different restrictions on the maximum lump sums available at retirement through commutation,

• Lump sums cannot be more than 25% of the cash value of the pension, as advised by the scheme actuary
• Lump sums cannot be such that they result in a 'scheme chargeable payment'
• The post commutation pension cannot be less than the member's GMP

As the lump sum cannot breach any of these limits, the maximum lump sum should be determined by the lowest limit applying to a member on retirement.

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.