Statement on Equalisation for GMPs AND the application of a ...

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2.8% and 3% are UK Guaranteed Minimum Pension Increase Orders effective on 6 April2004 and 2005 respectively.2. Late Retirement Pension iro NPA 60 trancheScheme method is to revalue pension to Normal Pension Age 60 and then apply a lateretirement factor.Late retirement pension at age 61 8/12 (1 8/12 years late)= [(264.00 x 1.0625 5 ) + (316.00 x 1.146)] x (1 + 0.12 x 1 8/12) = £863.54 pawhere:14.6% = Occupational Pensions (Revaluation) Order 2003 for 6 year revaluation period5 revaluations are granted to the female GMP at 6/4/1998 - 6/4/2002 inclusiveStatutory requirements for female at age 61 8/12(a)Contracting-out legislation - relates to all GMPRevalued female GMP at age 61 8/12= [1104.00 x 1.0625 5 ] x [(1 + (1x52+38)/700) x (1.028x1.03)]= 1,494.91 x 1.19498= £1,786.39 paIn practice this test would be carried out with the whole GMP against the Pre 97 pension.However, the fact that the minimum is clearly covered at retirement iro these elementsindicates that the overall test should be met.(b) Anti-franking and preservation legislationSee comment for males above.Pre 97 PPF compensation at Relevant Time1. NPA 65 trancheThis is firstly calculated prior to the application of the compensation cap and 90% multiplier.= 2,243.84 + 1,359.21x (1.027 x 1.03 – 1) = £2,322.42 paHowever, this now contains an element of female GMP. As the member is over female GMPage 60 at the Relevant Time, the GMP element is paid at 100%. The excess pension is paidat 90% since the member is below age 65 at the Relevant Time.= (1,359.21x1.027x1.03x 100%) + (2,243.84 – 1,359.21) x 90% = £2,233.95 pa2. NPA 60 trancheSince the member is age 63 at the Relevant Time the NPA 60 tranche is not affected by thecompensation cap and 90% multiplier.= [863.53 + 427.18 x (1.027x1.03 - 1)]= £888.23 pa149
where:[264.00 x 1.0625 5 ] x [(1 + (1x52+38)/700) x (1.028x1.03)]=427.182.7% and 3% are UK Guaranteed Minimum Pension Increase Orders effective on 6 April2006 and 6 April 2007 respectively.Back-paymentsThe member is entitled to the higher payment that would have been made to a member ofeither sex before the Assessment Date. The table below shows the annual rate of pensionfor the male and equivalent female with the higher figures at anytime shown in red.Although the male NPA 60 tranche is higher than the female NPA 60 tranche at 1/11/2005,once the NPA 65 tranche has been taken into consideration the member is better off beingtreated as a female member.Annual rate of pensionwith effect from:Male£ paEquivalent Female£ paNPA 60 NPA 65 NPA 60 NPA 65OverallShortfall£ pa01/11/2005 874.89 2,193.55 863.53 2,243.84 38.93*06/04/2006 874.89 2,193.55 875.06 2,280.54 87.1606/04/2007 874.89 2,193.55 888.24 2,322.42 142.22**01/05/2007*** 874.89 1,974.20 888.24 2,233.95* Would need to be pro-rated for the period 1/11/2005 – 06/04/2006** Would need to be pro-rated for the period 6/4/2007 – 01/05/2007*** From Relevant Time no further comparison necessaryOverall Increase in Pre 97 PPF compensation at the Relevant Time= (888.24 + 2,233.95) – (874.89 +1,974.20) = £273.10 paAt the Relevant Time the member would be better off being treated as a female member.The change in Pre 97 PPF compensation for this example has been illustrated using thestandard Pensioner Forms 3(a) below.150
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If you have any questions regarding
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A.4 Section 143 valuation requireme
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Combining information from several
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A.6 Schemes not included in the pil
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B.1 BackgroundB.1.1 Content of Part
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B.3 Statutory requirements for cont
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B.5 Interaction of the statutory re
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greater, no further adjustment is r
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For actives, the application of the
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B.7.4 Typically male deferred pensi
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B.8.3 Back-paymentsWhere pensioner
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B.10 Back-paymentsB.10.1 Back payme
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(c) New Pensioners between the RT a
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C.1 Data requirementsFor members of
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C.3 AssumptionsThis section contain
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females joining the scheme after ag
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C.4 PPF Standard FormsThese forms c
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Form 1 - Active members at the Rele
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Generalised formula for male deferr
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Generalised formula for female defe
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1 MGMP 65 = 0 if the member is aged
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Pensioner Form 3(b) - GMP only case
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GMP pensioners - use this section i
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Age at DOR = DOR - DOB (years and m
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PLUS applicable to pensioners who h
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Calculation of Accumulated Back-pay
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Calculation of uplift at Relevant T
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Uplift in Pension at Date of Retire
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C.5 Examples of theoretical calcula
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Active Example 1. Male active membe
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Form 1 - Active members at the Rele
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Statutory minimum test for NPA 60 t
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Deferred pensioner examplesThe exam
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Modified Method (2): Opposite sex c
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Adjustment to Pension revalued to t
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The revised NPA 65 tranche = total
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Adjustment to Pension revalued to t
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Generalised formula for female defe
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Factors used in the form 2(a) for E
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eing a late retirement pensioner fo
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Pensioner NPA 60 trancheThe member
Page 100 and 101: Factors used in the Pensioner Form
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Page 104 and 105: Factors used in the Male Deferred P
Page 106 and 107: Generalised formula for male deferr
Page 108 and 109: Example 5 - Member with tranches of
Page 110 and 111: Pre 97 Pension at Date retired from
Page 112 and 113: Back-paymentsThe member is entitled
Page 114 and 115: Pensioner Form 3(a) - not GMP only
Page 116 and 117: PLUS applicable to pensioners who h
Page 136 and 137: Pre 97 PPF compensation at Relevant
Page 142 and 143: Age at DOR = DOR - DOB (years and m
Page 146 and 147: Calculation of Accumulated Back-pay
Page 148 and 149: Pre 97 Pension at Date of LeavingPr
Page 152 and 153: Factors used in the Form 3(a) for E
Page 156 and 157: Factors used in the Form 3(a) for E
Page 160 and 161: Pensioner Example 6. Male pensioner
Page 162 and 163: Modified Method (2): Opposite sex c
Page 164 and 165: Factors used in the Form 3(b) for E
Page 166 and 167: May use instead of standard calcula
Page 168 and 169: Back-payments Form 4(b) - GMP only
Page 170 and 171: Uplift at Relevant Time (before app
Page 172 and 173: Calculation of Accumulated Back-pay
Page 174 and 175: D.1 Factors for calculating opposit
Page 176 and 177: D.2 Questionnaire to gather scheme
Page 178 and 179: Early retirement information15. Did
Page 180 and 181: Late retirement from either active
Page 182 and 183: NPAFGMP DOLFemale Deferred Pensione
Page 184 and 185: e.g. 65 MGMP DOL = male GMP at date
Page 186: 65 to RTEnter 1 if pension does not
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