BGCM EC May 2017

For example:

Take the case of a person who:

 became an Active Member on 15 July 2011 and



retires on 30 October 2022.

When this member retires, his or her pension is calculated in one slice. Let's say for the sake of the example that his or her Final Pensionable Pay is £30,000.

 The accrual rate for the whole of his or her Pensionable Service is 1/70th. Bearing in mind that Pensionable Service is measured in complete calendar months, this member has Pensionable Service between 1 August 2011 and 30 October 2022. That means he or she has Pensionable Service of 11 years and 2 months.

The pension accrued (rounded to the nearest pound) is:

11.1667 x £30,000 = 70

£4,786.00

Can I receive a lump sum as well as (or instead of) a pension?

Yes.

All members may take a cash lump sum, known as a Pension Commencement Lump Sum (PCLS), by giving up part of their pension. The lump sum is currently entirely free of tax. If you exchange part of your pension for a PCLS, your pension will be reduced by the amount of pension exchanged. The amount of the lump sum that the Scheme will pay in exchange for each £1 of pension given up is determined by the Trustees, who take advice from the Scheme Actuary. This rate of conversion is called a Commutation Factor, and varies according to the age of the member concerned.

For example:

Take the case of a member who is entitled to a pension of £10,000 p.a . He or she wishes to take a tax-free lump sum instead of part of his or her pension.

For the sake of the example, let's say that the Commutation Factor, at this member's age, is 18.

This member wants to surrender 25% of his or her pension for a lump sum.

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