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Teachers' Pension Scheme (England and Wales)

Purchase of additional pension and ceasing monthly contribution elections

Methodology for determining cost of AP

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Introduction Scope of Tables Methodology for determining cost of AP Methodology for paid-up AP credit calculations Methodology for calculating outstanding lump sum amount Limit on extra pension

Added pension can be purchased either by a lump sum payment or regular monthly contributions.

The following approach should be used to determine the cost of purchasing additional pension:

Cost = (AP / £250) x R

Where:

AP is the amount of additional pension to be purchased at member's date of election

R is the factor representing the cost of purchasing £250 of AP, selected with reference to the criteria set out in the bullet points below.

Factors in Tables x-702 to x-705 are to be used for determining the costs for a one-off lump sum payment to purchase additional pension.

Factors in Tables x-706 to x-719 should be used to determine the regular monthly contributions that should be paid to purchase AP.

These factors should be selected with reference to:

the member's age last birthday at election date,
the member's normal pension age (NPA) at the election date
chosen form of payment (either lump sum or regular contribution)
chosen form of benefit (either member only or member with dependant)

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