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

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females joining the scheme after age 60, NISPI will have no recordof any contracted-out earnings. Any opposite sex GMP providedusing this service will therefore be quoted as being zero.C3.8GMP withdifferent NPAsFor transferred schemes the PPF is using general scheme detailson the equalisation of normal retirement ages from the schemequestionnaire to pro-rata the GMP accrued between 17 May 1990and 5 April 1997 between the different NPAs that may applyduring this period.This is considered to be a reasonable approximation and should beappropriate providing that a scheme has not established comparators onan individual basis when equalising NPAs. It is expected that equalisationbased on comparators is unusual, however validation will be included inthe calculations to ensure that if there is an equalisation date but no NRA60 tranche, all GMP will be assigned to the NPA 65 service tranche.C3.9DependantsBroad brush approach adopted.The PPF holds virtually none of the data that is required for equalisingcompensation for dependants as in many cases the data required relatesto the deceased member in respect of whom no data has been transferredto the PPF.The PPF is therefore adopting a broad brush calculation for dependantswhere it can identify a GMP relating to the record. This will be based onthe average change in compensation that this exercise indicates isappropriate for equivalent pensioners in the transferred scheme. Wherethe PPF cannot identify a GMP for a dependant, no increase incompensation will be awarded.A separate form has therefore not been developed for dependants.C3.10BackpaymentsBroad brush approach adopted.The calculation of any back-payments due prior to the Assessment Dateto pensioners and dependants requires a year on year comparison of thepension actually paid to the member and those due as a member of theopposite sex, potentially going back as far as 1990. This calculationrequires extensive data which the PPF does not hold.The PPF is therefore adopting a pragmatic approach. Back-payments willbe calculated by taking the average of the uplift at Date of Retirementand the Relevant Time and multiplying this by the relevant period.The uplift at the Relevant Time however needs to be calculated before thecompensation cap, 90% multiplier (if applicable) and any changes thathave been made to benefits due to the admissible rules review. Aseparate form has been developed to calculate the back-payments.35
C3.11Interest onBackpaymentsbefore theAssessmentDateC3.12Pensionsharing ondivorceInterest on back-payments arising prior to the Assessment Datewill not be paid.In our experience the majority of scheme rules are silent on awardinginterest for late payment of benefits. In order not to exceed our statutoryobligations under s166, interest on any back-payments arising before theAssessment Date will not be applied unless it can be demonstrated thatthe scheme rules require it. In such cases where interest is required thiswill only be applied up to the Assessment Date.Pension credit/debit members represent a very small subsectionof PPF members. Their special status will not be taken intoaccount in the PPF’s calculations.Any pension credit / debit cases that exist for schemes that have alreadytransferred to the PPF will have taken place prior to the scheme’s transferto the PPF based on existing pension sharing orders legislation. Theadditional information required to carry out an accurate calculation of theappropriate increase in compensation for equalisation for GMPs for suchcases can be extensive and is not available to the PPF.The PPF will make an approximate allowance in the calculation for pensiondebit members. This will be achieved by reducing the adjustmentscalculated ignoring the pension debit by the relevant pension debitpercentage, where available.For pension credit members a similar approach to that used fordependants will be used (see C.3.9 for further details).The PPF considers this to be a pragmatic approach given the relativelysmall numbers of members affected and the relatively small increases incompensation resulting from this exercise.C3.13Compensationsharing ondivorceC3.14Backpaymentsformembers withno ongoingentitlement atthe calculationdateNo change required.Legislation now permits PPF compensation to be shared on divorce. Thislegislation doesn’t apply to schemes in assessment.No calculations required.Where a recalculation is required, the PPF does not hold any of therequired information on members who may have been affected byequalisation for GMPs who have died, fully commuted their pension ontriviality grounds, or otherwise extinguished their liability from thescheme. In addition it may not be practical or possible to make suchpayments.36
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 34 and 35: C.3 AssumptionsThis section contain
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 80 and 81: The revised NPA 65 tranche = total
Page 86 and 87:
Adjustment to Pension revalued to t
Page 88 and 89:
Generalised formula for female defe
Page 90 and 91:
Modified Method (2): Opposite sex c
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:
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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