If a member retires after Normal Pension Age (NPA) a late retirement uplift may need to be applied to the member's pension. An uplift will only need to be applied if the member was in pensionable service for part or all of the period between NPA and retirement. No uplift is applied to any Additional Pension or for any retirements where the member has no pensionable service between NPA and retirement.

Normal pension age is defined as a member's state pension age (or 65, if that is higher) in the career average section. For the purpose of this guidance, a member's expected NPA in the career average section is the same as their state pension age as set out in HMT Directions.

The uplift to be applied should be calculated in respect of the period the member was in pensionable service between NPA and retirement.

We note that for any period between NPA and retirement that the member was not in pensionable service, arrears of pension will be due. Further details are provided in the section Periods of deferment after NPA.

The benefits payable on late retirement are determined by applying the appropriate uplift factor to the relevant benefit entitlement at the date of retirement as follows. The factors are provided in the Consolidated Factors Workbook.

Late retirement pension =

(Full retirement earned pension in respect of service before NPA x Factor CLR1)

+ Full retirement earned pension in respect of service after NPA

+ Additional Pension

- (Pension sharing on divorce pension debit(s) x Factor CLR2)

- (Annual allowance pension debit(s) x Factor CLR2)

Points to note in using the factors:

• Full retirement earned pension should include in-service revaluation up to the date of retirement.
• Additional Pension and pension debits need to be revalued to the date of retirement.
• Late retirement factors should be selected from the appropriate table with reference to the number of years and complete months that a member was in pensionable service after their NPA.
• Where a member divorced after NPA, an adjustment is required to the pension sharing on divorce debit line of the formula above. This adjustment is set out in the section Divorce after NPA.
• Where one or more annual allowance pension debits were implemented after NPA, an adjustment is required to the annual allowance pension debit line in the formula above. This adjustment is set out in the section Annual allowance pension debits implemented after NPA.
• Factors should be applied before any lump sum commutation option is exercised.

Where a member has a period of deferment after their post-NPA period of Pensionable service, the late retirement factor applicable to a member's pension will be calculated in respect of only the period of post-NPA Pensionable Service, but arrears and interest will be due in respect of the subsequent period of deferment.

In this situation, the factors applicable to a member should be those in force at the date the retirement pension is ultimately calculated (rather than those in force on the date when the final period of Pensionable service ends).

It is our understanding that if a member re-joins active service following the period of post-NPA deferment, then pension entitlement for that period will be treated separately from that described in the first paragraph of this section. The period of membership under that employment should therefore not influence the periods of post-NPA Pensionable Service, and period of arrears, as described in the first paragraph of this section.

Where the member divorced after NPA the formula in the section Retirements after NPA will need to be adjusted. The adjustment to the formula depends on whether or not the member had left pensionable service for the final time by the date of the pension sharing order.

Member has not left pensionable service for final time at date of pension sharing order.

If the member had not left pensionable service for the final time by the date of the pension sharing order (i.e. the member was still in pensionable service, or subsequently re-joined pensionable service), the pension sharing on divorce pension debit(s) should be split into two elements, relating to service before and after NPA at the date of the pension sharing order. The split should be pro-rata to a members' accrued earned pension in respect of service before and after NPA at the date of the pension sharing order. A late retirement uplift applies only to the debit relating to service before NPA.

In these circumstances, the formula in the section Retirements after NPA should be modified as follows:

- [(Pension sharing on divorce pension debit relating to service before NPA x Factor CLR2 at age of leaving pensionable service) / Factor CLR2 at age of pension share]

+ Pension sharing on divorce pension debit pension relating to service after NPA

No late retirement uplift is applied in respect of the period between NPA and age at pension share, as this will already have been included in the calculation of the original debit.

Member has left pensionable service for final time at date of pension sharing order.

If the member had already left pensionable service for the final time by the date of the pension sharing order, the formula in the section Retirements after NPA should be modified as follows:

- Pension sharing on divorce pension debit relating to service before NPA

That is, no late retirement uplift is applied to the debit. This is because the full late retirement uplift due to the member for the period of pensionable service between NPA and the date of leaving service for the final time will already have been included in the calculation of the original debit.

Where one or more annual allowance pension debits are implemented after NPA, the formula in the section Retirements after NPA will need to be adjusted to allow for this. Each debit implemented after NPA will need to be adjusted separately.

The adjustment to the formula in the section Retirements after NPA depends on whether or not the member had left pensionable service for the final time by the date the pension debit was implemented.

For each debit implemented before the member left pensionable service for the final time, the formula in the section Retirements after NPA should be modified as follows:

- [(Annual allowance pension debit x Factor CLR2 at age of leaving pensionable service) / Factor CLR2 at implementation date]

No late retirement uplift is applied in respect of the period between NPA and implementation date, as the calculation of the original debit will have already included an allowance for this period.

For a debit implemented after the member left pensionable service for the final time, the formula in the section Retirements after NPA should be modified as follows:

- Annual allowance pension debit

That is, no late retirement uplift is applied to the debit. This is because the calculation of the original debit will have already included an allowance for the full period of pensionable service between NPA and the date of leaving service.

Where there are multiple pension debits, including debits implemented before and after NPA, the formula in the section Retirements after NPA should be modified as follows:

- (Annual allowance pension debit(s) implemented before NPA x Factor CLR2 at age of leaving pensionable service)

- [(First Annual allowance pension debit implemented after NPA but before leaving pensionable service x Factor CLR2 at age of leaving pensionable service) / Factor CLR2 at implementation date]

- [(Second Annual allowance pension debit implemented after NPA but before leaving pensionable service x Factor CLR2 at age of leaving pensionable service) / Factor CLR2 at implementation date]

- ...

- [(Final Annual allowance pension debit implemented after NPA but before leaving pensionable service x Factor CLR2 at age of leaving pensionable service) / Factor CLR2 at implementation date]

- Annual allowance pension debit(s) implemented after NPA and after leaving pensionable service for final time.