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

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