Factor Review 

The Scheme’s Actuary (an independent expert appointed by the Trustee) regularly reviews retirement factors to reflect any changes in financial conditions. The last amendment to factors occurred on 1 October 2023 to reflect the high inflation environment at the time. The Scheme’s Actuary has recently reviewed the factors and recommended an adjustment from 1 October 2024, bringing the factors more in line with the pre-1 October 2023 position. 

 

We are informing you of these changes as they could influence your decision about when to draw your pension, particularly if you are already planning to retire in 2024.  

 

 

How factors affect your pension 

If you have a deferred pension in NAPS, this is due to be paid in full from your Normal Retirement Age (NRA) which can be age 55, 60, or 65 years. If your NAPS membership ended after 31 March 2007, your pension will be made up of pre-2007 and post-2007 benefits. 

 

Your pension may be made up of several elements at different dates, but your entire pension must be drawn from a single retirement date when you retire. 

 

If you are age 55 or above, you can usually start drawing your pension anytime from now. 

Drawing your pension before your NRA 

If you draw any element of pension before its due date (NRA), we’ll reduce the amount we can pay you using early retirement factors provided by the Scheme Actuary to allow for a longer potential payment time.  The earlier you draw your pension, the greater the reduction.  

 

· The early retirement factors are being revised from 1 October 2024.  If you draw your pension on or after 1 October 2024, your pension amount is likely to be less than had you drawn it prior to this date.  

 

Drawing your pension after your NRA 

If you draw any element of pension after its due date (NRA), we’ll increase the amount we can pay you using late retirement factors provided by the Scheme Actuary to allow for the shorter potential payment time. 

 

Therefore, the longer you wait to draw your pension, the higher your yearly pension will be. 

 

· The late retirement factors were revised from 1 April 2024.  From 1 April 2024 pensions drawn after NRA are more than they were before that date. 

 

Options at retirement 

You can usually take a tax-free lump sum of up to 25% of the value of your Scheme benefits. If you want to take a tax-free lump sum, you can take this from your Additional Voluntary Contributions (AVCs) if you have any, or you can exchange some of your yearly pension, or both. The amount of tax-free cash we can pay you for each £1 of yearly pension exchanged is calculated using commutation factors provided by the Scheme Actuary.   

 

· The commutation factors are being revised from 1 October 2024 and are likely to be less than had you taken a lump sum before this date.  

 

All final retirement calculations are based on the factors in force on the date of retirement.We are informing you of these current changes as they could influence your decision about when to draw your pension, particularly if you are already planning to retire in 2024.  

 

Implementing new factors takes several months, and until the factors are implemented, BA Pensions cannot produce individualised quotations. The above has been provided as a guide on the possible impact should you retire shortly before or after 1 October 2024. 

 

Remember, you’re planning for the long term. Try to think about every possibility for you and your family before making a decision. The longer you delay drawing your pension, the higher the yearly pension amount will be. 

 

As with any important decision regarding your pension benefits, you should consider seeking independent financial advice. 

 

If you wish to draw your pension, please let the BA Pensions team know as soon as possible. 

 

From the Trustee of the New Airways Pension Scheme