Your deferred pension is made up of different component parts, which increase differently:
- Guaranteed Pension increases on 1 January each year based on the change in the Retail Prices Index (RPI) in the 12 months to the previous November.
- Level bonus does not increase (these are the 2% bonuses awarded between 2014 and 2019).
- Reducing bonus (bonuses awarded before 2014), decreases by the amount that the Guaranteed Pension increases on each 1 January up to and including 1 January 2019 (or until the reducing bonus falls to zero if this is sooner). This means the total of your Guaranteed Pension and reducing bonus stay the same.
Bonuses 2017-2019
On 1 January 2017, 2018 and 2019 members will receive an additional level bonus that is equal to 2% of their Guaranteed Pension.
Bonuses from 2020
No new bonuses will be awarded after 2019. Your existing level and reducing bonuses will be added together to form a level bonus which will no longer reduce. So from 2020 onwards, the RPI increases to your Guaranteed Pension will no longer be offset by reductions in your bonus.