New Actuarial Reduction Factors for Early Retirements from 1 July 2011
If you are thinking of retiring early, which you can do at any age from 55 onwards, you should be aware that if you draw your teacher's pension before normal pension age it will be reduced to take account of its early payment. A new set of Actuarial Adjustment factors (MS Word 64KB) were introduced in respect of all actuarially reduced benefits payable on or after 1 July 2011. The new factors also apply to the calculation of the employer's mandatory compensation in cases of premature retirement on grounds of redundancy or organisational efficiency. Different factors will apply in respect of any Additional Pension that has been purchased, depending on whether the Additional Pension election was made on or before 22 June 2010 or after 22 June 2010.
Members should use their own judgment and/or seek independent financial advice about whether to take early retirement on the basis of the Actuarially Reduced Benefits available but should note that:-
- the factors depend on your normal pension age (60 or 65)
- the same, age-related factor is applied to both the annual pension and lump sum;
- the revised factors are slightly more beneficial than those in use before July 2011.
Details of retirement options can be found on the Teachers' Pensions (new window) website and you can calculate an actuarially reduced pension and lump sum based on your own personal circumstances by using the Teachers' Pensions AAB/Premature retirement calculator (new window).
Further Pensions Information
Further advice on specific pension issues is available by clicking the appropriate link in the Further Pensions Information menu on the right hand side of this page.
Members needing further information or assistance should contact the Regional Centre.