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If you joined the Scheme on or after 1 July 2011, a reduction will be made to account for
all of the years between the date of your retirement and your 65th birthday. In other
words, if you retire at the age of 60, the reduction applicable for five years will be made.
For example:
If:
- you joined
before
1 July 2011,
- you want to retire at the age of 57 years and 6 months, and
- the pension you have built up is worth £15,000 p.a.
you will be entitled to draw your pension straightaway, provided that you obtain the consent of the
Trustees.
For the sake of the example, let's assume that 2/3rds of your pension was earned before 1 July 2011
and the rest was earned on and after that date.
Again, for the sake of the example, let's assume that the reduction factor that is applied is 4% for each
year that is taken into account for making a reduction.
The pension you earned before 1 July 2011 is £10,000 p.a. It will
be reduced by reference to your 60th birthday: that is, it will be
treated as if it is being paid 2 1/2 years early. The reduction to
this part of your pension is:
2.5 x
4%
=
10%
This part of your pension is therefore reduced by 10% and is now
£9,000
p.a.
The pension you earned on and after 1 July 2011 is £5,000 p.a. It
will be reduced by reference to your 65th birthday: that is, it will
be treated as if it is being paid 7 1/2 years early. The reduction to
this part of your pension is
7.5 x
4%
=
30%
This part of your pension is therefore reduced by 30% and is now
£3,500
p.a.
Your total pension is therefore
£12,500
p.a.