Retirement benefits

The Scheme is a defined benefit (final salary) pension scheme. This means that the pension you receive depends on how long you have been a member of the Scheme, and your final pensionable salary when you retire.

Your pension will be worked out using this calculation:

1/60^th x pensionable service x final pensionable salary

In other words, for every year that you are a member of the Scheme, you will earn an annual pension equal to 1/60^th of your final pensionable salary (although there are other factors that can influence pension at retirement, for example, periods of part-time service, service breaks, transfers in, pension sharing orders etc).

Part of your pension may be taken as a tax-free cash lump sum. Although the amount you can take as tax-free cash may be restricted (if the value of your pension is not sufficient to cover the value of your Guaranteed Minimum Pension), in general you may ‘commute’ (or exchange) up to 25% of the value of your pension for cash. If you take a cash lump sum, your pension will be smaller.

Your pension will be paid out in monthly instalments for the rest of your life and will be increased once a year, in line with increases in the cost of living.

See also Factsheet 3 Your Retirement Benefits.