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

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A.4 Section 143 valuation requirementsA.4.1 Underfunded schemesThe PPF expects the majority of schemes to continue to carry out their s143 valuationbefore allowing for equalisation for GMPs and the Statutory Minimum. Allowing forequalisation for GMPs and the Statutory Minimum will not change the outcome of the s143valuation (i.e. whether the scheme will transfer to the PPF or not) but only demonstratethat the scheme is more underfunded than indicated.A.4.2 Overfunded schemesSchemes that are clearly overfunded, and will not enter the PPF, are able to carry outtheir s143 valuation on scheme benefits that have not been equalised for GMP, providedthat the appointed actuary can add a statement to their s143 report to confirm that theoutcome of the s143 valuation (i.e. whether the scheme would transfer to the PPF or not)would not change if Protected Liabilities had been calculated after equalisation for GMPsand the Statutory Minimum. This statement should be added to all s143 valuation reportsoverfunded schemes submitted after 10 November 2011.Where the appointed actuary is unable to make such a statement in their s143 report thenthey should speak to their PPF Scheme Delivery Associate and PPF actuarial contact, whoare available to provide further support if necessary.7
A.5 Procedure for schemes included in the pilot studyThe procedure can be split into a number of steps as set out below. Until the PPF providesguidance on how the approach will be implemented more widely after the pilot study, onlytrustees and advisers of schemes included in the pilot study should perform the steps 1 to5 set out below.The adjustments required to meet the legislative requirements to equalise for GMPs and toapply the Statutory Minimum should be made after the trustees have cleansed theirscheme data.A.5.1 Step 1 – Collate all inputs requiredThe following information will be needed to carry out the calculations. In general, benefitinformation at the Relevant Time (the day before the Assessment Date) and GMPinformation at the date of leaving will be required if the PPF forms are to be used.a) Member and benefitdetailsInformation like that provided on the PPF standard datainterface layout (DIL), such as basic member information(DOB, NRD etc) and benefits at the Relevant Timecalculated before equalisation for GMPs.b) GMP data It is expected that schemes will have reconciled details ofboth the pre 6/4/1988 and post 5/4/1988 GMPs at thedate of leaving the scheme with NISPI as one of theassessment period tasks before they carry out thesecalculations.Opposite sex GMPs can be provided by NISPI as part oftheir Dual GMP calculation service. However, waiting forthese figures could cause delays. Instead trustees shouldconsider calculating these amounts from the reconciledGMPs using the factors contained in Part D.1. Alternativelyopposite sex GMP can be determined from earningshistory if available.Care should be taken for members where the period ofaccrual of GMP will change in the opposite sex calculationi.e. where accrual spans a period where males accrue GMPbut females do not. An example of one possible approachto the calculation of the opposite sex GMP in suchcircumstances is given in Part D.1.Amounts at date of leaving as well as at GMP payable agemay be required.c) Scheme informationGeneral information (such as the revaluation in defermentrates and rates for general pension increases in payment)for re-working members’ benefits may be required.The scheme questionnaire provided in Part D.2 will assistin collecting the necessary information.8
Page 5 and 6: If you have any questions regarding
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 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
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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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Generalised formula for male deferr
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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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Pre 97 Pension at Date retired from
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Back-paymentsThe member is entitled
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Pensioner Form 3(a) - not GMP only
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PLUS applicable to pensioners who h
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Pre 97 PPF compensation at Relevant
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Age at DOR = DOR - DOB (years and m
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Calculation of Accumulated Back-pay
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Pre 97 Pension at Date of LeavingPr
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2.8% and 3% are UK Guaranteed Minim
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Factors used in the Form 3(a) for E
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Factors used in the Form 3(a) for E
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Pensioner Example 6. Male pensioner
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Factors used in the Form 3(b) for E
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May use instead of standard calcula
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Back-payments Form 4(b) - GMP only
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Uplift at Relevant Time (before app
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Calculation of Accumulated Back-pay
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D.1 Factors for calculating opposit
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D.2 Questionnaire to gather scheme
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Early retirement information15. Did
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Late retirement from either active
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NPAFGMP DOLFemale Deferred Pensione
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e.g. 65 MGMP DOL = male GMP at date
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65 to RTEnter 1 if pension does not
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