Deduction for drawing your retirement pension early

Actuarial calculations assume that a member will pay contributions until they reach normal retirement age and will only start drawing pension payments once they reach normal retirement age. If a member applies to draw their retirement pension early, deductions must be made to compensate for the fact that the retirement pension is being paid out before it is actually due. These deductions are calculated using actuarial methods to compensate for the longer period for which the pension is drawn. They amount to 0.45% for each month in which the pension is drawn early. Example: for participants who are born from 1962 onwards and apply to take early retirement at the age of 62, the deduction amounts to 27% (60 calendar months x 0.45%). It is important to note that the deductions are taken from the pension entitlement accrued at the specific point in time. In other words, they are not taken from the retirement pension amount projected to be accrued by the time the normal retirement age is reached. The deduction continues for the entire duration for which the pension is drawn, i.e. even after normal retirement age is reached. Any survivors’ allowances subsequently due will also be calculated on the basis of the retirement pension less the deductions. (Legal basis: § 27 and § 30 of our Statutes.)