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Final Salary member in accrual

Yonkers420Yonkers420 Member
in Technical stuff

Hi All,

We have a member who is still accruing in a final salary scheme, but wants to make employer contributions in a separate PP to use up to their annual allowance.

Am I right in thinking we can only really take a best guess at what the DB accrual is because you only know after the tax year has finished? In which case we will have to carry forward each year once we know the final DB input?

Input would be appreciated

Thanks

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Comments

  • Yonkers420Yonkers420 Member

    Also i would add there are no issues with tapered aa etc

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  • arongunninghamarongunningham Member

    Yes.

    Once you have the starting pension income value (this is the pension that the member would get if they retired now at normal pension age) multiply by CPI (2.8% for September 2017) then multiply by 16.

    Then you take the value, when known, at the end of the year and multiply this by 16 only (not inc CPI).

    The difference is the pension input for AA purposes.

    If it's a straightforward 60ths/80ths scheme, you could estimate it with: Service / 60 or 80 x assumed salary at the end of the year. (if you do this, just make sure you say it's estimated etc)

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