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Calvin Matthews Pensions Administration Manager

Agenda TUPE HMRC limits on pension benefits Appeals End of contracting-out

Fair Deal for Staff Pensions H M Treasury guidance October 2013 Effective immediately Applies to central government and academy employees. Must keep employees in or eligible for LGPS membership. TUPE - Academies

Fair Deal for Staff Pensions Best Value Authorities Staff Transfers (Pensions) Direction 2007 Effective 1 October 2007 Applies to local government employees. Must keep employees in, or eligible for, LGPS membership or provide access to “broadly comparable” pension scheme. TUPE - Other

New provider becomes Admitted Body. Requires formal Admission Agreement and financial bond or guarantee. Must be signed by scheme employer. Must be completed at date of transfer. Actuarial fees up to £5000 plus VAT to calculate new employer contribution rate and adjust asset values. Benefits transferred fully funded or share of deficit? TUPE

TUPE information to Pensions 6 to 8 weeks PRIOR to actual transfer. If new provider defaults then any outstanding pension liabilities default to scheme employer. Responsibility of scheme employer to ensure this process happens. TUPE

Tax year 2014/2015 = £1,250,000 Calculation at retirement Annual pension multiplied by a factor of 20 plus any cash i.e. Annual pension of £30,000 plus cash of £90,000 LTA of 30,000 X 20 = 600,000 Cash = 90, LTA = 690,000 HMRC – Lifetime Allowance

Tax charge: 55% of excess if taken as cash or 25% of excess if taken as pension 2015 Budget £1 million from April 2016 Protections? Increased by CPI from April 2018 HMRC – Lifetime Allowance

Tax Year 2014/2015 = £40,000 Calculation each 31 March Increase in value of pension over the year using factor of 16 to obtain cash value of pension. Includes paying AVC’s and buying any additional pension. Promotional increases could breach this limit. Can use any unused relief from previous 3 years. HMRC – Annual Allowance

Tax charge: Excess treated as additional income and employee taxed at marginal rate probably 40% or 45%. Where tax charge exceeds £2,000 option for LGPS to pay tax and then adjust employee’s pension HMRC – Annual Allowance

Employee or dependants Informal review of decision or lack of one! 3 Stage formal process Internal Disputes Resolution Procedure (IDRP) provides stages 1 and 2 Stage 3 rests with the Pensions Ombudsman whose decision is binding on both parties. The Pensions Advisory Service (TPAS) involved between IDRP and Ombudsman. Appeals

Stage 1 IDRP – Head of Legal Services at Cornwall Council and should be made within 6 months of original decision. Decision within 2 months. Stage 2 IDRP – Head of Pensions at Administering Authority within 6 months of Stage 1 decision. Decision within 2 months Review by TPAS Pensions Ombudsman within 3 years of original decision. Appeals

April 2016 Coincide with new single tier State Pension Loss of National Insurance rebate Employee rebate of 1.4% Employer rebate of 3.4% Earnings between £5,824 and £40,040 for 2015/ /employers-fact-sheet.pdf /employers-fact-sheet.pdf End of Contracting-out

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