We have had a number of requests from Departments for clarification in relation to the payment of the balance of the 90% lump sum at normal preserved pension age under the Incentivised Scheme of Early Retirement. Following consideration, paragraph 5 of the Scheme as set out in Appendix A to Circular 12 of 2009: Incentivised Scheme of Early Retirement is amended as follows:

"5 The 90% balance of the lump sum, based on the salary scale point on the date the person reaches the normal preserved pension age, or the amount in cash terms calculated at the time of leaving, if more favourable, will be paid on reaching that age and will be subject to the taxation provisions in force on the date the application under this Scheme was approved."

As regards applications which have been approved but the date of retirement has been deferred, the condition in both paragraph 7 of Appendix A and paragraph 8 of Circular 12/2009 which state that an application cannot be withdrawn once it has been approved is qualified as follows:

“In the event of a change in pay arising from a Government decision which would impact adversely on the retirement lump sum, a person will be permitted to withdraw his/her application if management is not in a position to bring forward the retirement date in order to avoid such adverse effect.”

Should such a change occur, it will be necessary for Departments/Offices to reassess the position of those individuals who have been approved to retire under the ISER but whose retirement date has been deferred and, if possible, to bring forward the retirement date in order to avoid any adverse effect on the retirement lump sum. If this is not possible, then the individual must be given the opportunity to withdraw his/her application.

Because of the above amendments, valid applications should be considered up to and including 23 October. All other deadlines remain unchanged.

It is important that you bring the above to the attention of all relevant officers in your Department/Office and to the attention of any relevant Bodies/Agencies under your Department’s aegis.