Latest Pension Developments Non Local Authorities Forum 23 rd February 2016

Agenda Hymans Robertson – Ill health early retirements 2016 Year End The Employer area of our website Latest Pension Developments A.O.B.

Ending of Contracting Out New State Pension National Insurance Contributions Implications for us Communications

Taxation of Public Sector Exit Payments Recovery of exit payments £95k limit on value of exit payments English consultation and response What does it all mean for Scotland?

Payments in scope Redundancy payments Payments on voluntary exits Pension strain costs Severance or ex-gratia payments Payments for outstanding entitlement Compensation under terms of a contract Pay in lieu notice Compensatory added years ?

What does it mean for LGPS members? Current provisions under the regulations Cost cap must apply – how is this achieved? Reduced benefits or individual paying all or part of strain cost to receive an unreduced pension

Who will it affect? Not only high earners depends on length of service and number of years early they retire - key factors in the Strain Cost! Allowing for an element of redundancy payment leaving say £80K for Strain Cost, exit cap may start to apply :-

Retiring 5 years early – on £180,000 and 10 years service, or £90,000 pay and 20 years service, or £45,000 pay and 40 years service Retiring 10 years early broadly half the above - £45,000 pay and 20 years service

What’s next on taxation of exit payments Enterprise Bill receives royal assent late spring 2016 Scottish Government to determine the way forward exit-payment-recovery-regulations hment_data/file/498106/FINAL_Consultation_on_public_secto r_exit_payment_reforms_4_February_pdf_....pdf?_cldee=Y2h yaXMuZnJvaGxpY2hAZnMuZ2xhc2dvdy5nb3YudWs%3d&urli d=0

Pensions and Taxation 10 YearAnnual allowance (£000) Lifetime Allowance (£000) 2006/072151, /082251, /092351, /102451, /112551, /12501, /13501, /14501, /15401, /16401, /1740 (Tapered)1,000

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