Trivial commutation meaning

ARCHIVED This Practice Note, kept for reference only, sets out the statutory and regulatory amendments — including revisions to the FCA Handbook — that implemented the pension freedoms taking effect on 6 April 2015. Preparatory actions undertaken before 6 April 2015; Changes introduced on the day itself; and Subsequent technical tweaks to better realise the pension freedoms. The Note is not maintained and is supplied solely for information. From 6 April 2015, the pension freedoms permitted those with flexible benefits (that is, money purchase or cash balance benefits) to access their pension savings more readily from age 55, either through drawdown or by taking one or more cash payments called uncrystallised funds pension lump sums (UFPLS). For further details, see Practice Note: Pension freedoms—an introduction [Archived]. How were the pension freedoms implemented?...

Defined benefit (DB) pension scheme deficit A defined benefit (DB) pension scheme is in deficit when the value of its assets falls short of its liabilities. There are several ways to assess the shortfall, for example: on the scheme funding basis — required by the Occupational Pension Schemes (Scheme Funding) Regulations 2005, SI 2005/3377, and used to determine future contributions. If a shortfall is identified on this basis, the trustees and sponsoring employer must agree a recovery plan to clear it. For further information, see Practice Note: The scheme-specific funding regime — Recovery plan on a solvency basis — liabilities measured as the premium an insurer would need to secure the scheme benefits in full (the ‘buy-out basis’) on the Pension Protection Fund (PPF) basis — assets and liabilities valued using standard assumptions and the benefit structure set by the PPF on an accounting basis — assets and liabilities measured as required by an accounting standard For further information,...

A-day 'A-day' is the widely used term for the broad pension tax 'simplification' reforms that began on 6 April 2006. The changes covered: how much pension contribution was allowed, the kinds of schemes an individual could invest in, the sums that could be taken (and when), and the choices available for any remaining fund. A-day also introduced the annual allowance and the (now abolished) lifetime allowance. See: Annual allowance and Lifetime allowance. AFPS AFPS: Armed forces pension scheme; see Practice Note: Public sector pensions and family proceedings. Accrual rate The speed at which pension benefits build as pensionable service is completed in a final salary scheme, eg 1/60 for each year of pensionable service. Accrued benefits The benefits earned in respect of service up to a specified date. Added years Extra pension provided by adding further years of pensionable service in a salary-related scheme. Such additional years are secured via transfer payments or through additional voluntary contributions/augmentation...