The factor tables applicable for determining the contributions rates for EEPA options are as follows:
- P2EEPA65 (Table 733 in consolidated factors spreadsheet) - Contribution rate in respect of the EEPA 65 option, payable in addition to standard member and employer contribution rates.
- P2EEPA60 (Table 734 in consolidated factors spreadsheet) - Contribution rate in respect of the EEPA 60 option, payable in addition to standard member contribution rate and also in addition to the EEPA 65 contribution rate.
EEPA contributions are payable in addition to standard member and employer contributions. This section sets out how the contribution rate is determined. The contribution rate should be applied to the member's pensionable earnings over the scheme year. Therefore any pensionable earnings fluctuations will impact on the amount of the contributions paid for the EEPA option.
The EEPA 65 option and EEPA 60 option contribution rates in the factor tables are expressed as a percentage of the member's pensionable earnings. At the start of each scheme year in which an EEPA option is in force (or operation), the member's age (complete years, ignoring part years) is determined and the contribution rate corresponding to their NPA (in years and complete months, ignoring part months) is taken from the relevant EEPA 65 option (or EEPA 60 option) table. Normal pension age in the alpha section is defined as a member's state pension age, or 65, if that is higher. For the purpose of this guidance, state pension age is as defined in legislation on the calculation date. The scheme manager needs to inform members of their new additional EEPA contribution rate each year. Note that contribution rates will increase annually with age, all else equal.
This means EEPA option contribution rates are effectively determined at each 1 April, but are applied to pensionable earnings over the scheme year, in the same manner as standard member and employer contributions.
The scheme manager maintains a list of those eligible for the EEPA 65 and EEPA 60 options.
The cost of an EEPA 65 option is shared by the member and their employer. EEPA contributions are payable by the employee (in addition to standard member contributions) and the employer (in addition to employer contributions in accordance with current Accruing Superannuation Liability Charge (ASLC) rates). The split of the EEPA 65 option contributions is determined by the scheme manager.
The total additional contribution in respect of the EEPA 65 option is determined as follows:
Total additional contribution in respect of the EEPA 65 option = Pensionable earnings x P2EEPA65 contribution rate for age at 1 April
The total additional contributions in respect of the EEPA 65 option are split into member and employer proportions as follows:
Additional member contribution in respect of the EEPA 65 option = Total additional contribution x (1 - Employer proportion)
Additional employer contribution in respect of the EEPA 65 option = Total additional contribution x Employer proportion
Where:
Pensionable earnings are as defined in the relevant regulations.
Age at 1 April is the member's age in complete years (ignoring part years) on 1 April.
P2EEPA65 contribution rate is taken from table P2EEPA65 based on the member's age and NPA (in years and complete months, ignoring part months). Note that these percentages are total (member and employer) additional contribution rates.
Employer proportion is determined by the scheme manager and represents the employer's share of the total EEPA 65 option contributions.
Where members opt to reduce their effective pension ages to 60 years, then they pay further additional contributions.
The EEPA 60 option is only available to those members who have taken the EEPA 65 option. Only the member pays additional contributions in respect of this option.
The additional member contribution in respect of the EEPA 60 option is payable in addition to the additional contributions in respect of the EEPA 65 option.
The additional member contributions in respect of the EEPA of age 60 are determined as follows:
Additional member contribution in respect of the EEPA 60 option = Pensionable earnings x P2EEPA60 contribution rate for age at 1 April
Where:
Pensionable earnings are as defined in the relevant regulations.
Age at 1 April is the member's age in complete years (ignoring part years) on 1 April
P2EEPA60 contribution rate is taken from table P2EEPA60 based on the member's age.
