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Teachers' Pension Scheme (Scotland)

Purchase of additional pension and ceasing monthly contribution elections

Methodology for paid-up AP credit calculations

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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

The following formula should be used to calculate the paid-up AP credit for a member who ceased contributions before completing their AP payment period:

Credit = C = (P/R) x £250

Where:

P is the current amount of monthly contributions in respect of member's original election

R is the current amount of monthly contributions per £250 of AP purchased over actual payment period, at age last birthday at date of original election

These amounts should be calculated using the factors provided in Tables 706 to 715 and Tables 716 to 719 and not necessarily the factors in force at the date of the original election. The factors should be selected with reference to:

the member's age last birthday at the original election date,
the member's normal pension age (NPA) at the original election date
the original election date (which determines whether AP purchased increases in line with the Retail Prices Index (RPI) or the Consumer Prices Index (CPI) before coming into payment).

Where the actual payment period is not a whole number of years, a credit is calculated for the actual payment period rounded down to the nearest year. A further credit is calculated for the actual payment period rounded up to the nearest year. These figures are interpolated to obtain the paid-up credit.

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