Deferreds Basis: Legislation
GMPs as at Leaving Date
Check this box to revalue the member’s GMP between date of leaving and Date of Valuation.
If checked, the data items loaded for GMP i.e. GMP0 and GMPE0 will be assumed to be the Pre-1988 GMP and Post-1988 GMP at Date of Leaving respectively. SuperVal will revalue the GMP to Date of Valuation using the Fixed Rate Revaluations hard-coded into SuperVal based on the member’s Date of Exit. The GMP will be revalued using the number of Tax Years between Date of Leaving and State Pension Age less Tax Years between Date Of Valuation and State Pension Age. If NRA is greater than SPA, then Statutory Late Retirement Factors are applied.
If unchecked, SuperVal will assume the data items GMP0 and GMPE0 are the Pre-1988 GMP and Post-1988 GMP as at Date of Valuation.
SuperVal will revalue the GMP from date of valuation in line with the information specified on the Legislation tab.
Fixed Revaluation Rate to SPA
Check this box if the GMP Revaluation Rate to SPA is Fixed.
For Deferreds enter the data item for date of leaving active service in the Date Left Active on the Membership Tab.
If unchecked, the user will be required to enter the rate of revaluation to use in Revaluation Rate to SPA.
Revaluation Rate To SPA
This is the rate at which the GMP will be revalued to SPA when Fixed Rate Revaluations do not apply.
Select from the drop-down list the Global Financial Parameter that contains the rate applicable. Once selected, the current value of the Global Financial Parameter is shown to the right of this field.
To add a new Global Financial Parameter use the Edit Scheme Financials button at the bottom of this tab.
Past GMP Revaluation Rate(s) to NRA<SPA Factor Set
This field only applies to normal/early retirement pensions before SPA. It is not used for death in deferment benefits. If GMP retirement benefits payable before SPA are determined using a different rate of revaluation to that used to SPA then the past Revaluation Rates should be entered here.
SuperVal will roll back the GMP at valuation date to GMP as at date of leaving active service using either Fixed Revaluation Rate to SPA or Revaluation Rate to SPA as applicable. SuperVal will then roll forward the GMP to NRA using the rate(s) specified here. Therefore, if an entry is made in this field the data item containing the date of leaving active service must be specified in the Date Left Active on the Membership Tab.
Select from the drop-down list the Factor Table Set that contains the applicable past Revaluation rates.
Note that the Factor Table Set consists of a series of Increase Dates and Revaluation Rates (%). The values are NOT cumulative (this differs from the Factor Table Set currently in use for Pre Valuation Date Factor Set). Any Increase Dates that fall between a members' Leaving Date and the Valuation Date will be included (in full) in the past Revaluation Rates.
Revaluation Rate to NRA<SPA
This field only applies to normal/early retirement pensions before SPA. It is not used for death in deferment benefits. If GMP retirement benefits payable before SPA are determined using a different rate of revaluation to that used to SPA then that different rate should be entered here.
Select from the drop-down list the Global Financial Parameter that contains the rate applicable.
To add a new Global Financial Parameter use the Edit Scheme Financials button at the bottom of this Tab.
Once selected, the current value of the Global Financial Parameter is shown to the right of this field.
If this field is left blank, SuperVal will use either Fixed Revaluation Rate to SPA or Revaluation Rate to SPA as applicable.
Complete Years Pre NRA
This field is only available if Revaluation Rate to NRA< SPA is populated.
Exits before NRA, such as early retirement and death in deferment, are assumed to occur half-way through the year i.e. 0.5, 1.5, 2.5 years after the valuation date. By checking this box, the GMP will receive revaluations for the number of complete years only i.e. 0, 1, 2. If the box is unchecked, the GMP will receive an additional half-year of revaluation i.e. 0.5, 1.5, 2.5.
NRA Exits Rounding
This field is only available if Revaluation Rate to NRA< SPA is populated. Select from the drop-down list how the rounding on revaluations of GMP to NRA should be calculated. The options are:
- Exact Days
- Months Rounded Down
- Nearest Months
- Months Rounded Up
- Years Rounded Down
- Nearest Years
- Years Rounded Up
- Complete Tax Years
The discounting of the benefit will be based on years nearest.
Franking Code
For Actives and Deferred Members, there are five choices for Franking of GMPs for members retiring before SPA. For Pensioners only the first three options are available. Select from the drop-down list which of these to apply. The options are:
- None
- Partial Franking
- Full Franking
- Maximum Franking
- No Anti Franking Guarantee
An example to illustrate how these different options work is set out below:
Suppose you have a male member retiring at 60 with a pension as follows:
- Pension = £2,000
- GMP at 60 = £1,000 (included in above figure)
- GMP at 65 = £1,500
GMP revaluations between 60 and 65 are therefore £500 (£1,500 less £1,000).
Once in payment, the pension will increase at 5% per annum.
The additional pension at SPA for the GMP revaluations between 60 and 65 under each of the options are as follows:
None
All of the revaluations on the GMP are added to the pension at SPA.
So, the pension at 65 is calculated as
Partial Franking
Revaluations on the GMP between retirement and SPA, less scheme increases granted on the GMP, are added to the pension at SPA.
So, the pension at 65 is calculated as
Note that the difference between the GMP revaluations and scheme increases on the GMP can not be used to reduce the pension payable ie the item in square brackets cannot be negative.
Full Franking
All of the increases on the pension between retirement and SPA are franked against revaluation on the GMP.
So, the pension at 65 is calculated as
Note that the difference between the GMP revaluations and scheme increases on the whole pension can not be used to reduce the pension payable i.e. the item in square brackets cannot be negative.
Maximum
This option differs from Full Franking only if you have an early retirement decrement in your basis.
For the early retirements the calculation assumes there is No Anti-Franking guarantee. So the pension at 65 is calculated as
For the normal retirement the calculation assumes Full Franking. So the pension at 65 is calculated as
Note that the difference between the GMP revaluations and scheme increases on the whole pension can not be used to reduce the pension payable i.e. the item in square brackets cannot be negative.
No Anti Franking Guarantee
No antifranking guarantee is made at SPA.
So, the pension at 65 is calculated as
Franking In Deferment
Check this box if you want to allow for franking in deferment. The GMP benefits will not be added to the other PUPs but will be compared with the total Excess pension at each age and the greater of the two benefits valued. This enable the user to value PUPs that pre-date anti-franking legislation.
The calculations will take account of any pre SPA increases, Barber Adjustment and the Underpin before comparing the benefits.
The GMP payable on normal or early retirement before SPA may be different from the GMP at SPA increased in line with statutory requirements.
Statutory GMP Increases to NRA>SPA
This field determines the pension increases that are used to increase the GMP between SPA and NRA for retirements after SPA.
Check the box to increase GMPs by 1/7% per week, then by the assumed statutory GMP increases from SPA to NRA. The statutory GMP increases are hard-coded in SuperVal and are assumed to be 0% annually for Pre-1988 GMP and 3% annually for Post-1988 GMP.
Leave the box unchecked to increase the GMPs by 1/7% per week, then by the user specified pension escalation in payment from SPA to NRA. The pension increases in payment are those specified for Pre-1988 GMP and Post-1988 GMP respectively on the Financial tab.
Public Sector GMPs
Check this box to value public sector style treatment of GMPs. Leave this box unchecked to value private sector style treatment of GMPs.
This field is only available to some users.
Male PPF NRA (Levy Valuations)
Female PPF NRA (Levy Valuations)
On the Legislation Tab, enter the NRA to be attached to the GMP, which is converted in to excess pension, for PPF valuations.
Elsewhere, for Actives and Deferreds, select from the drop-down list which of the previously defined PPF NRAs applies to the pension or benefit slice. The PPF NRAs are specified on the PPF/Cap Tab.
For Pensioners enter the normal retirement age to be used as the PPF NRA in the PPF (S179 Levy) Valuation. The PPF NRAs are only used to determine the level of capping required. They do not override the Benefit Commencing Age. To allow for ill health retirements, use a sufficiently low age so that all members exceed this age i.e. 16. To allow for early retirement pensions, use an age such as 50.
Treat Pre 1988 GMP As Zero
Treat Post 1988 GMP As Zero
Check these boxes if you want to ignore either the Pre-1988 GMP or the Post-1988 GMP. (Check both boxes to ignore both.) The GMP will be assumed to have a zero value.
Ignore Pre 1988 GMP For Cash Benefit
Ignore Post 1988 GMP For Cash Benefit
Cash Commutation/Cash on Top is defined on the Ret Cash Tab and can be either a Percentage or a Multiple of the PUP. Check these boxes if you wish the Multiple or the Percentage to be based on the PUPs excluding either the Pre-1988 GMP or the Post-1988 GMP amount. (Check both boxes to exclude both.) Leave these boxes unchecked to include either the Pre-1988 GMP or the Post-1988 GMP amount.
Please note that where either the Pre-1988 GMP or the Post-1988 GMP is included, SuperVal will restrict any pension commuted to ensure that no GMP is exchanged for cash.
Ignore Pre 1988 GMP For Death Benefit
Ignore Post 1988 GMP For Death Benefit
Select how to value both the Pre-1988 GMP and the Post-1988 GMP for Death Benefits. The options are:
- Yes
- No
- Legislation.
The options are available for the Pre-1988 GMP and Post-1988 GMP separately.
If Yes is selected then no death before retirement benefits will be
payable in respect of either the Pre-1988 GMP or the Post-1988 GMP.
If No is selected then SuperVal will value the Pre-1988 GMP or the
Post-1988 GMP multiplied by the Spouse’s Reversion Death before
Retirement on death before retirement.
If Legislation is selected then the benefits payable on death before
retirement will follow legislation i.e. a 50% spouse’s pension on death
before retirement will be payable in respect of the Pre-1988 GMP for
male members only and a 50% spouse’s pension for all members in respect
of the Post-1988 GMP.
Pre 1988 Start Date
Post 1988 Start Date
If you have selected to Use Barber Start and End Dates in either the
Pre-1988 GMP ERF Indicator or the
Post-1988 GMP ERF Indicator or Split
According to Service in the Pre/Post-1988 GMP Underpin Indicator then
SuperVal requires a Start Date and a Finish Date for the Pre-1988 GMP or
the Post-1988 GMP.
The Start Date can either be a fixed date or a data item. To use a fixed date enter the date here. The date should be in the DD/MM/CCYY format. To use a data item select from the drop-down list the data item containing the appropriate data.
SuperVal knows that the Pre-1988 GMP can only have been accrued between 6/4/1978 and 5/4/1988 and that the Post-1988 GMP can only have accrued between 6/4/1988 and 5/4/1997 and uses this information in the apportionment.
Pre 1988 Finish Date
Post 1988 Finish Date
If you have selected to Use Barber Start and End Dates in the either
the Pre-1988 GMP ERF Indicator or the
Post-1988 GMP ERF Indicator then SuperVal
requires a Start Date and a Finish Date for the Pre-1988 GMP or the
Post-1988 GMP.
The Finish Date can either be a fixed date or a data item. To use a fixed date enter the date here. The date should be in the DD/MM/CCYY format. To use a data item select from the drop-down list the data item containing the appropriate data.
SuperVal knows that the Pre-1988 GMP can only have been accrued between 6/4/1978 and 5/4/1988 and that the Post-1988 GMP can only have accrued between 6/4/1988 and 5/4/1997 and uses this information in the apportionment.
Pre 1988 ERF Indicator
Post 1988 ERF Indicator
Select from the drop-down list which set of Early Retirement Reduction Factors to use for the Pre-1988 GMP or the Post-1988 GMP. The options are:
- ERF1
- ERF2
- Use Barber Start and End Dates
If Use Barber Start and End Dates is selected, the user will be
required to enter these dates on the Legislation tab. In addition, the
user will be required to enter the Start
Date for the GMP benefit and the Finish
Date for the GMP benefit. For males,
SuperVal will apply ERF2 between Barber Start Date and Barber End Date
and ERF1 for all other periods of service. For females, SuperVal will
apply ERF2 for service prior to the Barber End Date and ERF1 for service
after this date.
Pre 1988 Dynamism
Post 1988 Dynamism
This is the rate at which the Pre-1988 GMP or the Post-1988 GMP will increase between date of retirement and SPA (if later). Select from the drop-down list which of the previously defined pension increase rates to use. The options are:
- Main
- Special
- Pension Increase 3
- Pension Increase 4.
This indicator will also be used to determine which pension any SPA adjustments for the Pre-1988 GMP or the Post-1988 GMP are made to.
Pre 1988 Underpin Indicator
Post 1988 Underpin Indicator
This field is only available if the Benefits Underpinned on the Underpin Tab has been checked. It will be used to define how the Pre-1988 GMP or Post-1988 GMP should be treated for Underpin purposes. The options are:
- Exclude
- Include
- Split According To Service
If Split According To Service is selected then the user will be
required to enter the Start and Finish Dates for the GMP benefits.
SuperVal will then use these dates to determine the proportion of the
Pre-1988 GMP or Post-1988 GMP that is before or after the Underpin
Commencement Date on the Underpin Tab.
Pre 1988 GMP Adjustment Factor
Post 1988 GMP Adjustment Factor
A negative or positive loading can be applied to the Pre-1988 GMP or the Post-1988 GMP.
Enter the number as a multiplier i.e. 1.1 for a 10% increases or 0.9 for a
10% decrease. If no adjustment is required enter 1. If 0 is entered the
liability for the Pre-1988 GMP or Post-1988 GMP respectively will be
zero.
This field can be used to allow for any contingencies such as children’s pensions, which are not valued by SuperVal.
Barber Start Date
This field is used to define the start of the Barber Period after which
males and females must have equal NRA. It will be available when Use
Barber Start and End dates is selected for the ERF
Indicator on the Pups Tab or either the
Pre-1988 ERF Indicator or the Post-1988
ERF Indicator on the Legislation Tab.
For most schemes the Barber Start Date will be 17/05/1990. Enter the Barber Start Date in DD/MM/YYYY format.
Where an early retirement decrement applies, Early Retirement Pension Reduction Factors will need to be specified separately for males and females for the periods
- prior to Barber Date
- inside the Barber Window i.e. 17/5/1990 to the date of equalisation and
- after the date of equalisation i.e. Barber End Date.
For males, SuperVal will apply ERF2 between Barber Start Date and Barber End Date and ERF1 for all other periods of service. For females, SuperVal will apply ERF2 for service prior to the Barber End Date and ERF1 for service after this date.
Barber End Date
This field is used to define the end of the Barber Period after which
males and females must have equal NRA. It will be available when Use
Barber Start and End dates is selected for the ERF
Indicator on the Pups Tab or either the
Pre-1988 ERF Indicator or the Post-1988
ERF Indicator on the Legislation Tab.
Enter the Barber End Date in DD/MM/YYYY format.
Where an early retirement decrement applies, Early Retirement Pension Reduction Factors will need to be specified separately for males and females for the periods
- prior to Barber Date
- inside the Barber Window i.e. 17/5/1990 to the date of equalisation and
- after the date of equalisation i.e. Barber End Date.
For males, SuperVal will apply ERF2 between Barber Start Date and Barber End Date and ERF1 for all other periods of service. For females, SuperVal will apply ERF2 for service prior to the Barber End Date and ERF1 for service after this date.
Edit Scheme Financials
Clicking the Edit Scheme Financials button takes you to the Scheme Financials menu.
Here you will be able to see a list of all the Financials that are currently defined. Double-click on the tree to see an expanded list of all financial assumptions that are defined.
Click the Add/Edit Financials to change the value of one of the assumptions.
SaveAs
Click the Save As button to save with a new file name.
Save
Clicking on the Save button allows you to save the entries.
Quit
Clicking on the Quit button allows you to exit without saving any of your changes.
In some of the screens you will be asked to confirm if you want to exit Ignoring all changes. If you click Yes, the file will be closed without saving any changes. If you click No you will be returned to your original screen.
From the Browser, the Quit button will take you to a graphical display of the results.