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

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Pensioner Example 6. Male pensioner retired early from schemeReceiving GMP only at Relevant TimeTimelineAge62549/12 6567Date ofleaving(DOL)Date retiredfrom scheme(DOR)SchemeNPARelevantTime(RT)Membership DetailsDate of Birth = 8 February 1940Date joined scheme = 1 January 1992Date of leaving the scheme = 8 January 1995Date retired from scheme = 1 November 2002 (age 62 9/12 (nearest month)*)Normal retirement date = 8 February 2005 (age 65)Assessment Date = 2 May 2007Relevant Time (RT) = 1 May 2007 (age 67)The scheme provided revaluation on the pension in deferment at the following rates: Fixed Rate Revaluation on GMP (in this case 7% pa) Statutory revaluation on the excess pensionThe scheme paid the following rates of increase on pensions in payment between retirementand the Relevant Time: 0% pa on Pre 97 excess pension Statutory increases on Post88 GMP awarded every 6 AprilThe scheme calculated early retirement pensions by applying an early retirement factor tothe pension revalued to date or early retirement. The early retirement factor was 3% pasimple (*calculated using the members age calculated to the nearest month).Pre 97 Pension at Date of LeavingDeferred Pension at date of leaving = £760.63 pa split into GMP and excess elements asfollows:Scheme NPA Post 88 GMP Excess Pension Total Pension£ pa£ pa£ paNPA 65 660.63 100.00 760.63159
Pre 97 Pension at Date retired from scheme (age 62 9/12)Scheme method is to revalue pension to date of early retirement and then apply an earlyretirement factorEarly retirement pension at age 62 9/12 (2.25 years early)= [(660.63 x 1.07 8 ) + (100.00 x 1.205)] x (1 - 0.03 x 2.25) = £1,170.83 pawhere:20.5% = Occupational Pensions (Revaluation) Order 2001 for 7 year revaluation period8 revaluations are granted to the male GMP at 6/4/1995-6/4/2002 inclusiveScheme would have checked that this would be sufficient to cover the:Statutory requirements for male at age 65(a) Contracting-out legislationRevalued GMP at age 65 = 660.63 x 1.07 9 = £1,214.54 paEarly retirement pension is insufficient to cover the GMP from age 65. The schemepermitted the member to rearrange his benefits so that they were of equal value. Thisresulted in the member receiving a pension of £1,000 pa until age 65 when the pensionwould have been uplifted to meet the Revalued GMP of £1,214.54 pa.(b) Anti-franking and preservation legislationThe Trustees will have taken into consideration these pieces of legislation in setting thecalculation of the member’s early retirement pension. As this scheme uses unisex earlyretirement factors it is assumed that the Trustees’ early retirement factors and method tookinto account the statutory requirements relating to both males and females. No furthercheck is therefore required.Pre 97 PPF compensation at Relevant Time= 1,214.54 x 1.03 x 1.027 x 1.03= £1,323.30 pawhere:3%; 2.7%; and 3% are UK Guaranteed Minimum Pension Increase Orders effective on 6April 2005, 2006 and 2007 respectively.160
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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
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Factors used in the Pensioner Form
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1 MGMP 65 = 0 if the member is aged
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Factors used in the Male Deferred P
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Example 5 - Member with tranches of
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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 150 and 151: 2.8% and 3% are UK Guaranteed Minim
Page 152 and 153: Factors used in the Form 3(a) for E
Page 154 and 155: 1 MGMP 65 = 0 if the member is aged
Page 156 and 157: Factors used in the Form 3(a) for E
Page 158 and 159: 1 MGMP 65 = 0 if the member is aged
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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