Early payment reduction factors are changing for Old and New Benefits members.

Background
If a member takes his or her pension before normal pension age (age 60 for Old and New Benefits members and age 65 for Career Average Benefits members) it is reduced for early payment. The early payment reduction factors are reviewed jointly by the BBC and Trustees each year.
The change
     •      For current and future deferred members, the early payment factors will be made cost neutral from 6 April 2010.
     •      For active members, the early payment factors will be made cost neutral for future service (including Added Years and service credits) from 6 April 2010.
     •      For active members, the early payment factors will then be made cost neutral for past service (as well as future service) from 6 April 2015.


Active members will retain the existing early payment reduction factors on pensionable service to 6 April 2010 until 6 April 2015, at which point the above reduction factors will apply on all pensionable service. The revised rates of reduction will also apply, to all service, when an active member (Old and New Benefits) leaves service without retiring or applies for flexible payment.
Increasing life expectancy and lower than expected investment returns have, amongst other things, added to the costs and risks of running the Scheme. The revised scale of reduction is higher than the current scale and more accurately reflects the cost to the Scheme of paying your pension early.
Change is necessary to provide security for all members.
Career Average Benefits members are not affected by this change. Also there is no change to the benefits payable at normal pension age and the reduction factors only apply if you request early payment of your pension.

For more information go to:-

http://www.bbc.co.uk/mypension/en/sites/updates/pages/091211.shtml