This note is provided for the Department for Education (DfE) in our capacity as actuarial advisers to the Teachers' Pension Scheme (TPS). It provides instructions on how to determine the appropriate lump sum to be paid (directly or via deduction from the benefits, in accordance with the regulations) by NPA 60 members in respect of outstanding contributions for Past Added Years (PAY) and additional family benefit (AFB) contracts.

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.

The capitalisation factors in Table 911 (Table 804 in the Consolidated Factors Workbook) are only appropriate for members with a normal pension age of 60 for all their benefits.

Any cases arising for mixed service members who have some benefits with a normal pension age of 65 are not covered by this note and should be referred to the Government Actuary's Department (GAD).

Cases covering members who reduce the rate at which additional PAY contributions are payable are not covered by this note and should be referred to GAD. The amount of reckonable service the member is entitled to count should be calculated on an actuarial basis.

Cases covering members who previously varied their election to pay additional family benefits at a higher rate but the Secretary of State is not satisfied that the corresponding declaration of normal health was made in good faith, are not covered by this note and should be referred to GAD. The factors applicable under these cases are the responsibility of the Secretary of State (as noted in the regulations).

The section of the guidance Calculating the lump sum amount for outstanding contributions (subsection Contributions due in respect of all of the remaining contribution period) sets out how the outstanding lump sum should be calculated, when contributions are due in respect of all of the remaining contribution period.

The outstanding lump sum should be calculated differently when contributions are only due in respect of the contribution period after a member's 60th birthday. The section of the guidance Calculating the lump sum amount for outstanding contributions (subsection Contributions only due in respect of the contribution period after a member's 60th birthday) sets out how the outstanding lump sum should be calculated for these cases.

The regulation allow members who have paid PAY contributions while in part-time employment to elect to have their purchased PAY service treated as if they had been in full-time employment. The section Calculating the lump sum amount for outstanding contributions sets out how the amount required to purchase this option should be calculated.