DB schemes - early leavers Flashcards
Under what circumstances can a member gain a refund on their contributions to a DB scheme?
If they left the scheme within 2 years of joining and haven’t transferred in any other pension rights.
How are contribution refunds taxed on the member?
20% on first £20k and 50% on the excess.
In what situation is the survivor’s benefit likely to be restricted by the scheme trustees?
If the survivor is much younger than the deceased member. May also cease if survivor remarries.
If serious ill health retirement is taken, what is the tax treatment of the lump sum?
Before 75 - tax-free but will trigger BCE
After 75 - must have had some LTA left, taxed at highest marginal rate
How are ordinary rights accrued up to 2009 revalued?
CPI up to a max of 5%
How are ordinary rights accrued after 2009 revalued?
CPI up to a max of 2.5%
How are contracted-out rights accrued before 1997 revalued?
NAEI or a generous fixed rate
How are requisite benefits accrued between 1997 and 2009 revalued?
CPI up to a max of 5%
How are requisite benefits accrued after 2009 revalued?
CPI up to a max of 2.5%
How are ordinary rights accrued before 1997 escalated?
No statutory escalation
How are ordinary rights accrued between 1997 and 2005 escalated?
CPI up to a max of 5%
How are ordinary rights accrued after 2005 escalated?
CPI up to a max of 2.5%
How are contracted-out benefits accrued before 1997 escalated?
As per the state pension triple lock
How are requisite benefits accrued between 1997 and 2005 escalated?
CPI up to a max of 5%
How are requisite benefits accrued after 2005 escalated?
CPI up to a max of 2.5%
