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

More documents

Recommendations

Info

C.3 AssumptionsThis section contains brief details of the broad assumptions that the PPF has made indeveloping the general calculations required.C3.1SufficientexcesspensionNon-pensionersAll active and deferred pensioners have sufficient Pre 97 Pension at dateof leaving the scheme (whether payable at age 60, 65 or another NPA) tocover the equalised GMP at date of leaving. This means that equalisationfor GMPs only changes the split of the total pension accrued prior to 6April 1997 at the date of leaving into GMP and excess pension and not thetotal pension.For active and deferred pensioners this is considered to be a reasonableassumption due to the lower rates of GMP accrual that apply for membersin these categories at the Relevant Time. See B.6 and B.7 for furtherjustification.PensionersFor pensioners the PPF does not have details of the Pre 97 Pension at thedate of leaving the scheme available to check this assumption. However,it is clear from an analysis of some of the detailed records that we haveavailable that a similar assumption is not appropriate for all pensioners.The PPF has therefore developed two separate calculations for pensioners.The first calculation assumes (in a similar way to non-pensioners) that achange is required only to the split of the total Pre 97 Pension at the dateof leaving the scheme into GMP and excess pension. The secondcalculation covers the situation where it is clear that a pensioner isreceiving Pre 97 Pension at the Relevant Time relating to their GMP only(i.e. the extreme position).C3.2SinglerevaluationmethodC3.3Schemesmethod ofcalculatingearly / lateretirementpensionsA single method of revaluation in deferment applies to all excesspension earned between 17 May 1990 and 5 April 1997.This is consistent with the majority of scheme designs.Pensioners at the Relevant Time who took early or late retirementfrom their scheme had their early / late retirement pensionscalculated by applying a single factor to either the pensionrevalued to the date of retirement or the pension projected toNormal Pension Age (NPA).Whilst it is clear that schemes adopt a variety of methods for calculatingearly/late retirement pensions, it is expected that applying factors to thecalculation of benefits will be the most common approach. The schemeinformation collected on the scheme questionnaire should indicate if thisassumption is appropriate or if further assumptions are required.33
C3.4Early / latepensionfactorsC3.5CommutationUnisex early and late retirement pension factors have been usedin the calculation of pensioners benefits.Although sex-specific actuarial factors are currently permitted foroccupational pension schemes, our experience suggests that the majorityof schemes use unisex factors. Our calculations assume that pensionersbenefits have been calculated using unisex factors and that these factorsreflected the different statutory requirements that applied to both sexes.Again scheme information collected on the scheme questionnaire shouldindicate if this assumption is appropriate or if further assumptions arerequired.(i) No allowance will be made for pension the member may havecommuted on retirement.It is likely that many pensioner members, who are shown as receivingcompensation equal to their GMP only, may have commuted pension inexcess of the GMP on retirement. Details of any pension commuted arenot held by the PPF.Our forms therefore make no allowance for any pension the member mayhave commuted on retirement. Increasing a pensioners’ GMP to theopposite sex GMP may therefore result in additional compensation greaterthan that strictly required, as it is likely that the scheme may haverestricted the options available to the member on retirement.(ii) Any additional compensation awarded to retired members willbe paid as compensation.Members who have retired at the date the calculation is carried out willnot be able to commute any additional compensation awarded.Active and deferred pensioners at the Relevant Time who have not retiredwhen any increase in compensation is calculated will be able to commutea proportion of any additional compensation on the standard PPF termsavailable at the date of retirement.C3.6Relevant GMPDetails of members contracted-out earnings are recorded byNISPI for tax years. GMP accrued between 17 May 1990 – 5 April1997 can be calculated by pro-rating either the post 5 April 1990GMP or the post 5 April 1988 GMP.This is considered to be a reasonable approximation and the PPF is doingthis for transferred members using relevant service calculated to numberof days.C3.7Opposite sexGMPNISPI’s “Dual GMP calculation facility” can provide opposite sexGMP or this can be calculated using member’s GMP details.It is recognised that GMPs from NISPI’s “Dual GMP calculation facility” willnot accurately reflect the opposite sex GMP for: females who have remained in service beyond age 60, as NISPIcalculate the opposite sex post 5 April 1990 GMP based on serviceto age 60 only, due to National Insurance Contributions ceasing atGMP Payable Age.34
Page 5 and 6: If you have any questions regarding
Page 8 and 9: A.4 Section 143 valuation requireme
Page 10 and 11: Combining information from several
Page 12 and 13: A.6 Schemes not included in the pil
Page 14 and 15: B.1 BackgroundB.1.1 Content of Part
Page 16 and 17: B.3 Statutory requirements for cont
Page 18 and 19: B.5 Interaction of the statutory re
Page 20 and 21: greater, no further adjustment is r
Page 22 and 23: For actives, the application of the
Page 24 and 25: B.7.4 Typically male deferred pensi
Page 26 and 27: B.8.3 Back-paymentsWhere pensioner
Page 28 and 29: B.10 Back-paymentsB.10.1 Back payme
Page 30 and 31: (c) New Pensioners between the RT a
Page 32 and 33: C.1 Data requirementsFor members of
Page 36 and 37: females joining the scheme after ag
Page 38 and 39: C.4 PPF Standard FormsThese forms c
Page 40 and 41: Form 1 - Active members at the Rele
Page 42 and 43: Generalised formula for male deferr
Page 44 and 45: Generalised formula for female defe
Page 46 and 47: 1 MGMP 65 = 0 if the member is aged
Page 48 and 49: Pensioner Form 3(b) - GMP only case
Page 50 and 51: GMP pensioners - use this section i
Page 52 and 53: Age at DOR = DOR - DOB (years and m
Page 54 and 55: PLUS applicable to pensioners who h
Page 56 and 57: Calculation of Accumulated Back-pay
Page 58 and 59: Calculation of uplift at Relevant T
Page 60 and 61: Uplift in Pension at Date of Retire
Page 62 and 63: C.5 Examples of theoretical calcula
Page 64 and 65: Active Example 1. Male active membe
Page 66 and 67: Form 1 - Active members at the Rele
Page 68 and 69: Statutory minimum test for NPA 60 t
Page 70 and 71: Deferred pensioner examplesThe exam
Page 72 and 73: Modified Method (2): Opposite sex c
Page 74 and 75: Adjustment to Pension revalued to t
Page 78 and 79: Modified Method (2): Opposite sex c
Page 80 and 81: The revised NPA 65 tranche = total
Page 84 and 85:
Modified Method (2): Opposite sex c
Page 86 and 87:
Adjustment to Pension revalued to t
Page 88 and 89:
Generalised formula for female defe
Page 90 and 91:
Page 92 and 93:
Factors used in the form 2(a) for E
Page 94 and 95:
Generalised formula for male deferr
Page 96 and 97:
eing a late retirement pensioner fo
Page 98 and 99:
Pensioner NPA 60 trancheThe member
Page 100 and 101:
Factors used in the Pensioner Form
Page 102 and 103:
1 MGMP 65 = 0 if the member is aged
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 118 and 119:
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
Pre 97 PPF compensation at Relevant
Page 138 and 139:
Page 140 and 141:
Page 142 and 143:
Age at DOR = DOR - DOB (years and m
Page 144 and 145:
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:
Page 156 and 157:
Factors used in the Form 3(a) for E
Page 158 and 159:
Page 160 and 161:
Pensioner Example 6. Male pensioner
Page 162 and 163:
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
show all

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

Create successful ePaper yourself

Delete template?

Save as template?