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Inland Revenue limitsThe Inland Revenue imposes limits on contributions to,and benefits payable from, UUPS.Glossary of termsSome of the words and phrases usedin this Guide have special meanings.These are highlighted and explainedat the back of this Guide.The Inland Revenue lays down strictlimits on the amount of benefits that canbe provided for members of an exemptapproved pension scheme like UUPS.These limits must be taken into accountwhen determining all benefits andcontributions and may override thenormal UUPS provisions in somecircumstances.The calculation of the maximum benefitswhich can be provided is complicated andvaries according to an employee’s length ofservice on leaving and any pension benefitsfrom previous employments.If your continuous membership of UUPS orone of its predecessor schemes commencedon or after 1 June 1989 you are subject to theoperation of the “Earnings Cap”. This means:1 The Pensionable Earnings used tocalculate your life cover (death in servicebenefit) provided by the pension schemecannot be higher than the Earnings Cap.2 Your pension from the scheme (calculatedon your Final Pensionable Earnings whenyou leave) cannot be higher than 2/3rds ofthe Earnings Cap if you have 20 or moreyears’ Pensionable Service. If you haveless than 20 years’ Pensionable Servicewhen you leave, your pension cannot behigher than 1/30th of the Earnings Capfor each year of Pensionable Service.For the 2002/2003 tax year the Earnings Capis fixed at £97,200. This limit is reviewedeach April by the Government and may beincreased at this time. The maximum increasewhich will be applied in any one year will bedetermined by the level of price inflation.If you require more detailed information onInland Revenue limits and how they affectyour benefits, please contact the SchemeAdministrator (see page 24).20 United Utilities Pension Scheme Members’ Guide