flashcard 2
Fixed Protection 2012 - protection up to the lifetime allowance charge up to a maximum of
£1.8m
What triggers the MPAA
Taking an UFPLS
Drawing from a flexi-access capped drawdown fund
Exceeding capped drawdown limit
Taking a stand-alone lump sum with primary protection
Taking a scheme pension in a small scheme
What is pension offsetting
When divorcing or dissolving your civil partnership, all your assets and those of your ex-partner are taken into account.
If you decide to opt for pension offsetting, each party keeps their pension assets. But these are then offset against the other assets – for example, if one person has a large pension pot, the other might get the house (assuming it has a similar value).
What is pension sharing
Pension sharing allows a member’s pension savings to be split at the point of divorce or annulment of a marriage or, for civil partnerships, on dissolution or annulment. In this article, to keep things simple, we’ll use ‘divorce’ to cover each of these.
What is earmarking
Pension earmarking allows the courts to make an order requiring part, or all, of the member’s pension benefits (except the state pension) to be paid to their ex-spouse or ex-civil partner when they become payable.
How often must a registered pension scheme submit an accounting for tax (AFT) return to HMRC
Quarterly
Role of pension ombudsman
Investigate complaints about how pension schemes are run
Tax relief for employer contributions is normally spread over more than one accountancy period if the relevant excess contribution is at least
£500,000.
£500 - £1m - 2 accounting periods
£1m - £2m - 3 accounting periods
£2m or more - 4 accounting periods
Unauthorised payments charge
Tax charge of 40% of the unauthroised payment made for the benefit any scheme member.
Unauthorised payments surcharge
additional tax charge of 15% where the value of the unauthorised payments is 25% or more of the fund value.
Pensions in Payment from DB Occupational Schemes must increase by at least
LPI - Limited Price Indexation. since April 1997
Which body sets out the codes of practice for the trustees of an occupational pension scheme
The pension regulator.
What is the codes of practice
The aim of the codes is to set out how the pensions regulator sees a well run scheme going about complying with a particular regulatory obligation.
Short Service Refund
When a member leaves the service of the defined benefit scheme employer and does not
have a statutory right to preservation, it may be possible for them to receive a refund of their
own contributions paid into the scheme, with or without interest.
available if employed for less than two years.
Short service refund tax
20% on first £20k and remainder taxed at 50% - rests with scheme admin rather than member.
Refund to employer is taxed at 35%.
Non-eligible jobholders for auto enrolement
under age of 22
over SPA
earn less than the earnings trigger but more than the lower level of qualifying earnings.
don’t need to be auto enrolled but must be made aware of the right to join scheme. If joining they can join like anyone else can.
Eligble jobholders for auto enrolment
At least 22 and under SPA
Above the auto enrollment earnings trigger
automatically enrolled
non eligible jobholders for auto enrolement
between 16 and 21, or SPA and 75
above the auto enrolment earnings trigger
not automatically enrolled buy can opt in
between 16 and 75
equal to or below the auto enrolement earnings trigger
not automatically enrolled but can opt in
Entitled jobholders for auto enrolment
between 16 and 75
without qualfiying earnings
not automatically enrolled but the employer has to facilitate them joining a pension scheme if asked but need not to contribute
Lower level of qualifying earnings
£6,240
Earnings trigger for automatic enrolement
£10,000
Upper level of qualifying earnings
£50,270
Eligble jobholder are auto enroled if earnings are over £10k.
AE minimum contribuiton
8% - 3 employer & 5 employee
what is fixed protection 2012
introduced due to reduction in LTA.
Required individual to make election to HMRC by 5 Apri l2012 to allow benefit testing to be based on the 1.8m LTA.
No further pension contributions.
No transfer of benefits unless a permitted transfer
no new registered scheme (unless it was to receive a permitted transfer of existing benefits)
Accrual limited to relevant percetgae for DB
Needed to have at least £1.5m in pension benefits.
What is fixed protection 2014
introduced due to reduction in LTA.
Required individual to make election to HMRC by 5 April 2014 to allow benefit testing to be based on the 1.5m LTA.
No further pension contributions.
No transfer of benefits unless a permitted transfer
no new registered scheme (unless it was to receive a permitted transfer of existing benefits)
Accrual limited to relevant percetgae for DB
Needed to have at leat £1.25m in pension benefits
What is fixed protection 2016
introduced due to reduction in LTA.
Required individual to make election to HMRC by 5 April 2014 to allow benefit testing to be based on the 1.25m LTA.
No further pension contributions.
No transfer of benefits unless a permitted transfer
no new registered scheme (unless it was to receive a permitted transfer of existing benefits)
Accrual limited to relevant percetgae for DB
Needed to have at least £1 m in pension benefits
What is primary protection
Available to those with pension rights worth more than £1.5m on 5 April 2006.
Further benefit actual is permitted.
Allows people to have the value of their right at 5 April 2006 increased in line with the standard lifetime allowance and not be subject to a tax charge
How were pre A-day benefits revalued
takes into account reference to earnings, length of time they worked for the employer, when they joined the scheme
Individual Protection 2014 and 206
provides individualised lifetime allowance capped at £1.5m and £1.25m.
Pension contributions can continue to be paid.
Enhanced Protection
This applies to individuals who wanted full protection from the lifetime allowance charge when they come to take their benefits. Enhanced protection allows the pension fund to grow to any amount without it being subject to the lifetime allowance.
Could protect tfc. E.g. if tfc at
how often must a db scheme provide a statement of beefits to a guy aged 45 who is an active member
only on client request
bid and offer
bid - what you would buy it at and offer is what it would be sold.
difference was commonly 5%
maximum guarantee period when ourchasing a lifetime annuity via crystallised funds
none
irrecovable trust
trus tthat cannot be undone without proper provision made to secure the benefits due under it
When must a scheme admin submit an event report to hmrc after a reportable event
31 january following the tax year n which the report event occured
when should a proposal form be completed
only after a kfd and kfi has been given to the client
who should receive a copy of a recovery plan
the pesnion regulator
waiver of premium with tax releif - what date
6 april 2001.
waiver can still be created via separate policies but no tax relief
underpinned lta
£1.8m
Footballer - each year before age 55, what is lta reduced by
2.50%
db quote before expected retirement date
must be at least 6 weeks before
dc schemes aware of pension wise if within how many months of normal minimum pension age
six
Direct offer, employees receive
information on how they can obtain a pack or explanatory documents.
fos compensation limit for pensions
£415k
total pension input amount - db schemes defintion
the increae i value of an indiviuals pension benefit during the pip
