You will be awarded a deferred pension if you:
- Leave the scheme before you are able to draw your benefits or
- You leave the scheme and are between the ages of 55 and 59 and you do not wish to draw your benefits immediately
The amount of your deferred pension will be the value of your pension account at the date of leaving.
A deferred pension is due and payable at your State Pension Age. This means that you can no longer draw your benefits in full at age 60 as you would if you were retiring from active service.
The early retirement reduction factors for a retirement from deferred status can be found in section 2.6 of the Government Actuary's Department guidance on Early payment reductions.
Example – How an early reduction percentage is worked out
A: Age at date when benefits are paid = 55 years 0 months
B: State Pension Age = 67 years 0 months
Number of years and months between A and B = 12 years 0 months
Early reduction factor = 0.534
Percentage reduction = 1 - 0.534 = 0.466 x 100 = 46.6%
A deferred pension will increase each year in line with the Consumer Price Index (CPI). An Annual Benefit Statement will be produced each year which will show you the current value of your deferred pension.
If you return to scheme membership within five years of leaving, then your deferred pension will be automatically joined to your new scheme membership.