From: neil@invidion.co.uk
Newsgroups: uk.finance
Subject: Re: Pension rules, pre or post A Day?
Date: 7 Jun 2006 03:31:33 -0700
   posting-account=f0YIrg0AAAARxP4nJijkyA_2eBXCEEJZ

I think I follow what you are saying....

However, are you talking about a Final Salary scheme, or an
Occupational Money Purchase scheme (such as an EPP) ?

What is important here is that you are taking the benefits now. The
fact that your normal retirement date was in 2003 is irrelevant.

In a nutshell, if the post A-Day rules mean that you will enhance your
benefits, then the new rules will apply. If you would be disadvantaged
by the new rules, you can apply for protection.

Under an EPP, if your lump sum entitlement was, say, equivalent to 20%
of the fund value, then you do nothing and get a lump sum of 25%.

However, if you are talking about a Final Salary scheme, things may not
be any different, because the Trustees may not have changed the rules
of the scheme.

The formula for calculating lump sums under Final Salary schemes that
operate on an accrual rate of 1/60th per annum or lower has changed
(this now often gives a higher lump sum entitlement). For more details,
see
http://www.invidion.co.uk/aday_final_salary_tax_free_cash_calculator.php


However, just because this has changed, it does not mean that the old
scheme will enhance your benefits.

Remember, the new rules have changed the MAXIMUM benefits that can be
taken. However, your scheme may pay out benefits based on their scheme
rules that are less than the maximum, because that is what the scheme
rules state.

I think you may need to provide a little more info about the exact type
of pension scheme you were a member of, and how what the rules of the
scheme permit.

Neil.

Stickems. wrote:
> No benefits have been taken. I want the post A-Day rules to apply, because
> they ignore the calculations, that limit the pension and the tax free cash
> to a percentage of final remuneration, which are in the pre A-Day rules.
> You say all pensions operate under the new rules. If a normal retirement
> date was in 2003 and the pension is backdated to 2003 can it be assumed that
> the pension will be calculated under the new rules and that it won't limit
> the tax free cash and the pension to percentages of final remuneration?
>
>
>  wrote in message
> news:1149666564.550928.181910@j55g2000cwa.googlegroups.com...
> | By 'deferment' do you mean that you are postponing taking the actual
> | benefits, or have you received any money from the pension ?
> |
> | The new rules use a term called 'crystallisation', which refers to the
> | act of physically taking the benfits from a pension - so I'm not sure
> | what you mean by 'pension is backdated' - either you have received
> | payments from your pension scheme, or you haven't.
> |
> | If you haven't physically taken any benefits from the plan yet, and the
> | pre A-Day rules were more beneficial (i.e. above the lifetime limit,
> | etc), then you can apply to protect these benefits from the changes
> | until March 2009. Lump sum entitlements of greater than 25% of the fund
> | value should be automatically protected.
> |
> | All pensions now operate under the new rules. What I think you may mean
> | by 'retrospective A Day rules' is the ability to protect pre A-Day
> | benefits from the changes if they will be adversely affected. However,
> | this is not the same as applying 'retrospective rules' - all it is
> | doing is giving transitional protection to existing benefits.
> |
> | Neil.
> |
> | Stickems. wrote:
> | > If a pension matured pre A Day and is in deferment which rules will
> apply if
> | > the pension is backdated to a date prior to A Day. Is it the so called
> | > retrospective A Day rules or is it the rules that pertained prior to A
> Day?
> |