Instead of taking your deferred pension at your Normal Pension Date, you may elect in writing, with the consent of the Trustees, to take your deferred pension early if you have reached the age of 55, or earlier if you are suffering from incapacity.  If you are suffering from incapacity the Trustees may agree to your deferred pension being paid earlier only if certain requirements set out in legislation and the Scheme rules are met (see Ill-health Retirement for more information).

If you retire before your Normal Pension Date, your pension will then be reduced for early payment to reflect the longer payment period.  Any benefits payable in the event of your death once your pension has come into payment will also be calculated by reference to this reduced amount.

Please note, unless you are a male who left the Scheme before 17 May 1990, if your Normal Pension Date is age 65 and you were employed before 1 April 2006, then no actuarial reduction is made if you retire between 60 and 65.

Early retirement requires the consent of the Trustees.  Any deferred member wishing to take early retirement should make their request in writing to the Pensions Department.  It will then be put on the agenda for the next Trustees' meeting.

Your pension is based on the benefit you had built up at the date you left Pensionable Service, plus any increases.

Your pension will be increased between the date you left and your eventual retirement, to help protect it against inflation. 

The Scheme provides you with a Guaranteed Minimum Pension (GMP) in respect of your Pensionable Service (if any) before 6 April 1997.  This is because the Scheme is contracted-out of the State Second Pension and so you are not entitled to any SERPS benefit in respect of that part of your pension.

Your deferred pension in excess of your GMP is increased from the date your Pensionable Service ends until your Normal Pension Date as required by legislation.  Currently, this requires that any part of your deferred pension derived from your Pensionable Service before 6 April 2009 is increased by 5% p.a. compound, or if less an increase in line with inflation measured over the period between when you left Pensionable Service and your Normal Pension Date.  That part of your deferred pension derived from your Pensionable Service on or after 6 April 2009 is currently increased by 2.5% p.a. compound, (as required by legislation) or if less, in line with inflation measured over the period between when you left Pensionable Service and your Normal Pension Date.

If you retire early your pension will then be reduced to take account of the longer period for which it is going to be paid. (You should note that there may have to be a restriction on the early payment of your benefits from the Scheme.  This is because the early retirement pension must be at least sufficient to cover the GMP.)

At the date your pension comes into payment, you may exchange part of it for a cash sum.  The calculation of your cash amount (which is currently tax-free) is complex and depends on the amount of your pension at retirement.  Broadly, you can take up to 25% of the value of your benefits as a cash sum (subject to a maximum of 25% of your available Lifetime Allowance).  You will be told how much of your pension you can exchange for a cash sum shortly before payment is due to start.  Should you choose to take a tax-free cash lump sum, your remaining pension must be at least equal to your Guaranteed Minimum Pension

Your pension will be paid by monthly instalments, in advance on the first of each month, for the rest of your life.  Like your pay, it will be taxable and will be subject to income tax payable through PAYE.  It will be paid directly into your bank/building society account.

The Lifetime Allowance means the allowance for the total value of pension benefits you can build up tax efficiently during your lifetime.

The Lifetime Allowance for the 2011/12 tax year is £1.8 million, however it will reduce to £1.5 million in the 2012/13 tax year.

The majority of members will not be affected by the lifetime allowance limits.  The current limit of £1.8 million is equivalent to a final salary pension of £90,000 p.a.  To calculate the lifetime allowance value of the Group Pension Scheme, take the value of your pension on retirement, and multiply it by 20.  For example, if your total pension at retirement is £9,500 p.a. multiply by 20 = £190,000.  You may need to adjust this figure if you are entitled to any enhancements or protection on your lifetime allowance.

At each point when benefits come into payment from the Group Pension Scheme, your lifetime allowance will be checked.  You will be asked to provide details to the Pensions Department of any other pension benefits which have either already come into payment, or which will come into payment at the same time as your Group Scheme pension.  If your benefits exceed the lifetime allowance, then any excess which is paid from the Group Pension Scheme will be paid to you as a lump sum, and tax deducted at a rate of 55%.

Your pension will be increased each year after retirement in the following way:

a) Any Guaranteed Minimum Pension earned between April 1988 and April 1997 will increase by 3% p.a. or the rise in inflation, if lower.

b) Your pension earned between April 1997 and March 2005 will increase by 5% p.a. or the rise in inflation, if lower.

c) Your pension earned since April 2005 will increase by 2.5% p.a. or the rise in inflation, if lower.

d) Further discretionary increases may be given on your pension but are not guaranteed.

subject to a minimum guaranteed increase of 1% p.a. being paid on the whole of the pension (please note the 1% guarantee does not apply to members whose employment started after 1 April 2006).

However, the Press has stated its intention to review pensions in payment annually with a view to granting discretionary increases on the pension in excess of the GMP, normally in line with inflation, subject to the Scheme having sufficient assets.