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Document I have no Protection, how is Uniform Accrual Formula calculated?

The Uniform Accrual Formula (UAF) calculation works by increasing the amount of benefit that would otherwise be payable by a proportion of the extra benefit that you would have earned had you remained as a Mental Health Officer (MHO) until retirement (including any doubled years). The proportion is equal to the ratio of your MHO membership to your total potential membership to age 55 (excluding any doubled years). The formula is as follows:

Final years’ pensionable pay    x    Actual MHO membership    x    Total potential membership to age 55
          80 (accrual rate)                Potential membership to age 55


An example shows how a UAF calculation would work if you continued in a MHO qualifying post to age 55 is as follows:

Mary currently has 14 years MHO membership and if she was allowed to remain on 1995 Scheme by the time she reaches age 55 she would have built up MHO membership of 26 years. Mary would therefore qualify for six doubled years making her membership at age 55, 32 years.

Providing Mary does not have a break of more than five years, her pay at retirement will be used to calculate her pension. Therefore assuming her pay is £35,000, the UAF calculation would be:

£35,000 / 80 x 14 / 26 x 32 = £7,538

Without using the UAF calculation, Mary’s standard Preserved Rights benefit calculation would be:

£35,000 / 80 x 14 = £6,125

As you can see, the UAF calculation provides Mary with the highest pension and therefore she will automatically receive this as opposed to the lower pension without the UAF calculation.

Please note: Uniform Accrual is only tested at retirement, an estimate of this cannot be done.
 
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