Various restrictions on lump sum payments are imposed by the pension taxation regime and other relevant legislation. The scheme administrator should ensure that the payment of benefits is compliant with these as well as with the scheme regulations.

The annual pension amount payable in respect of conversion of a lump sum (in addition to any other pension in payment) should be determined as follows:

Pension amount payable = Lump sum amount / Factor

Where:

Lump sum amount is the amount that would otherwise be received by the member if the lump sum or repayment of contributions could be made under the scheme regulations.

Factor should be determined as applicable for the member's age (in completed years) as set out below. The factors apply to both male and female members.

Table A1 contains factors for ages 75 and above. These factors are to be used for the conversion of a lump sum for final salary section members over age 75.

Table A2 contains factors below age 75. These factors are to be used for converting the repayment of contributions to an annuity where:

1. A final salary section member does not satisfy the service qualifying conditions, had a salary of over £5,000 and did not accrue service after 5 April 1980; or
2. A final salary section member's automatic retirement lump sum exceeds the permitted maximum and the excess is to be converted into a pension; or
3. A career average section member under age 75 does not satisfy the service qualifying conditions.

The annuity under (1) (which applies for final salary section members only) is payable from life from the member's 60^th birthday. Therefore, the factors to be used are those at age 60.

The annual pension amount is payable to the member only. A pension will not be paid to any surviving dependant following a member's death.

For the avoidance of doubt, the factors should not be used for inverse commutation arising from a failure to sign a Lump Sum Declaration.