Pension Protection Fund
Knottygr
Member
I have a client who has a final salary pension with the pension protection fund and has asked if this will affect his annual allowance (whether he will have accrual from this). My understanding is that even deferred FS pensions have a level of pension input due to the deferred revaluation. However I can't seem to get a definitive answer RE the PPF. It looks like the PPF will revalue benefits in line with statutory legislation rather than the scheme rules. I would assume this leads to some form of pension input but I cannot find confirmation of this. It also seems like it would be difficult to get this information from the PPF.
Anyone had a similar issue or know the answer to my question?
Thanks
Comments
I think it's CPI Max 2.5%, but best bet is to give the PPF a call, it's generic information because it's the same for everyone.
Once you have the annual increases, you'd then need to do a DB Scheme AA input calculation, which is always fun.
Hi there
I don't know if this will help? In open / live schemes, deferred members are usually treated as having no accrual provided the increase in there benefits does not exceed:
the ‘relevant percentage’, plus
the ‘relevant statutory increase percentage’.
My understanding of the position for members of schemes in the PPF is that once the scheme goes into the PPF, there is no further 'accrual' because the scheme effectively is taken over by the PPF, but benefits are revalued:
As there is no accrual, there can be no pension input for the annual allowance, so no need to do a DB accrual calculation.
Best to check with the PPF to be absolutely certain but there is bit more info on when the annual allowance does not apply to deferred members, including the relevant percentage here:
https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm051200#IDAQYPMB
Agree with Caro. Not building up further excess benefits as a deferred member so can ignore.