This section illustrates how a pension credit should be calculated for a member who is transferring pension into the STPS.

The pension credit awarded to the member should be calculated as:

Pension credit = CETV / [(F_x^P) + ([3/8] x F_x^S)]

where

CETV is the member's incoming transfer value

F_x^P is the relevant gross pension factor for a member aged x

F_x^S is the relevant survivor's pension factor for a member aged x

The relevant factors are set out in the consolidated factor workbook (see Tables 225 - 232). Factors should be selected with reference to a member's NPA, sex and age. Normal pension age is defined as a member's State Pension age (or 65, if that is higher) in the STPS. For the purpose of this note, a member's expected NPA in the STPS is the same as their State Pension age as set out in HMT Directions.

Members with non-integer NPAs

Where a member has a non-integer normal pension age, then factors should be interpolated. For example, for a member with a normal pension age of 67 years and 2 months the main pension factor would be:

F_x^P(NPA 67 years 2 months) = F_x^P(NPA67) + (2 / 12) x [F_x^P(NPA68) - F_x^P(NPA67)]