Pensioners Basis: Legislation
Fixed GMP Revaluation Rate to SPA
Check this box if the GMP Revaluation Rate to SPA is Fixed.
The revaluation rate will be determined by SuperVal for each member
based on the data contained in the standard data item LD - Leaving
Date.
If unchecked, the user will be required to enter the rate of revaluation to use in GMP Revaluation Rate to SPA.
GMP 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.
Revaluation Rate when BAGE<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. 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.
If this field is left blank, SuperVal will use the Revaluation Rate to SPA.
Reduce Pensions at SPA
Check this box if the pensions defined on the Pensions Tab will be reduced at SPA (or earlier death) when the GMP comes into payment. If this option is selected the Use Approximate GMP Ratio check box becomes available. This can be used to approximate the GMP offset from each of the pensions if this data is unavailable.
If the GMP data underlying each of the pensions in available then the user will be required to enter this in the Pre/Post-1988 Included at Retirement and Pre/Post Included at Valuation Date.
Leave the box unchecked if there are no GMPs or if the GMPs are to be paid in addition to the pensions specified on the Pensions Tab.
Use Approximate GMP Ratio
When the Reduce Pensions at SPA on the Legislation Tab is checked and the underlying GMP for each of the pensions on the Pensions Tab is not available, SuperVal can use an approximate allocation of the total GMPs to those pensions where Include in Adjustment at SPA/Death on the Pension Tab is selected.
To use this functionality, check this box. The user will then be required to enter Pseudo GMPs at both retirement and the valuation date below.
Franking Code for NRA<SPA
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
PPF NRA
- Legislation Male PPF NRA
- Legislation Female PPF NRA
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.
Total Pseudo Pre-1988 GMP at Retirement
This field is only required if Use Approximate GMP Ratio is checked.
Select from the drop-down list the data item containing the total Pre-1988 GMP underlying the pensions at retirement for members who have not yet reached SPA.
Total Pseudo Pre-1988 GMP at the Valuation Date
This field is only required if Use Approximate GMP Ratio is checked.
Select from the drop-down list the data item containing the total Pre-1988 GMP underlying the pension at Valuation Date for members who have not yet reached SPA. This will enable the correct adjustment (subject to Franking Code) to be made at SPA.
This GMP can be different from the standard GMP data items (GMP0 and GMPE0).
For example, a member who retires from deferred status before SPA where the GMP revaluations from date of leaving are not payable until SPA.
Pre-1988 GMP Adjustment Factor
A negative or positive loading can be applied to the Pre-1988 GMP.
The entered adjustment is applied to the standard data item. Enter the
number as a multiplier i.e. 1.1 for a 10% increase 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 will be zero.
This field can be used to allow for any contingencies, such as children’s pensions, which are not valued by SuperVal.
Total Pseudo Post-1988 GMP at Retirement
This field is only required if Use Approximate GMP Ratio is checked.
Select from the drop-down list the data item containing the total Post-1988 GMP underlying the pension at retirement for members who have not yet reached SPA.
Total Pseudo Post-1988 GMP at the Valuation Date
This field is only required if Use Approximate GMP Ratio is checked.
Select from the drop-down list the data item containing the total Post-1988 GMP underlying the pensions at Valuation Date for members who have not yet reached SPA. This will enable the correct adjustment (subject to Franking Code) to be made at SPA.
This GMP can be different from the standard GMP data items (GMP0 and GMPE0).
For example, a member who retires from deferred status before SPA where the GMP revaluations from date of leaving are not payable until SPA.
Post-88 GMP Adjustment Factor
A negative or positive loading can be applied to the Post-1988 GMP.
The entered adjustment is applied to the standard data item. Enter the
number as a multiplier i.e. 1.1 for a 10% increase or 0.9 for a 10%
decrease. If no adjustment is required enter 1. If 0 is entered the
liability for the Post-1988 GMP will be zero.
This field can be used to allow for any contingencies, such as children’s pensions, which are not valued by SuperVal.
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.
Save As
Click the Save As button to save with a new parameter description.
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.