When a member with a Defined Benefit (DB) pension retires they can choose to exchange an amount of annual pension for a cash sum. When working out the lump sum and annual pension, a factor is used to calculate how much pension must be given up to provide the cash lump sum.
For example, if the factor is 15:1, then if £10,000 of annual pension is given up, it could be exchanged for a sum of £150,000.