This section relates to members who have not yet retired at the Calculation Date. Calculation of the pension offset for members who retired on or before the Calculation Date describes the calculation required where members have already retired at the Calculation Date.
The calculation of the offset is different for the classic, classic plus, premium and nuvos schemes. The calculation for each scheme is described below.
The calculation of the pension offset for classic members is:
Pension offset = AATAX / (PENFAC + (3 x LSFAC))
Where:
AATAX is the Annual Allowance tax charge that the member has notified the scheme that they wish to meet via the scheme pays mechanism.
PENFAC is the pension factor from Table A1 (Table 1-607 of the Consolidated Factors Workbook), based on the member's NPA, gender and age at the Calculation Date.
LSFAC is the lump sum factor from Table A1 (Table 1-607 of the Consolidated Factors Workbook), based on the member's NPA, gender and age at the Calculation Date.
We understand that a small proportion of classic members have an NPA over 65.
For classic members there will also be an offset to the member's lump sum. This is calculated as:
Lump sum offset = 3 x Pension Offset
Where:
Pension Offset is the offset calculated above.
The calculation of the pension offset for premium members is:
Pension offset = AATAX / PENFAC
Where:
AATAX is the Annual Allowance tax charge that the member has notified the scheme that they wish to meet via the scheme pays mechanism.
PENFAC is the pension factor from Table A1 (Table 1-607 of the Consolidated Factors Workbook), based on the member's NPA, gender and age at the Calculation Date.
We understand that a small proportion of premium members have an NPA over 65.
For classic plus members, the method described in Premium Members should be used and the offset made from the premium portion of their pension. In the unlikely event that a classic plus member has insufficient pension from their premium service to cover the scheme pays offset then an additional deduction in respect of the remainder of the tax charge should be made from the classic portion of their pension using the method described in Classic Members.
The calculation of the pension offset for nuvos members is:
Pension Offset = AATAX / (PENFAC x REVAL)
Where:
AATAX is the Annual Allowance tax charge that the member has notified the scheme that they wish to meet via the scheme pays mechanism.
PENFAC is the factor from Table A2 (Table 1-608 of the Consolidated Factors Workbook), based on the member's gender and age at the Calculation Date.
REVAL is the relevant revaluation factor from Table REVAL (Table 1-001 of the Consolidated Factors Workbook). The appropriate factor is the one corresponding to the number of 1st Aprils between the Calculation Date and the member's NPA. Where the member is older than NPA at the Calculation Date then the number of 1st Aprils should be assumed to be zero.
