91热爆

Statutory Scheme Pays

The Scheme will meet any Annual Allowance tax charge to the extent that it is required by law to do so, i.e. where:

• your pension saving under the Scheme exceeds the standard Annual Allowance (£40,000 in 2022/23 and £60,000 in 2023/24);
• your total tax charge exceeds £2,000; and
• you notify us by 31 July in the year following the year in which the Annual Allowance charge relates (unless you are planning to take all your Scheme benefits in a particular tax year and you also want the Scheme to pay an annual allowance charge for the same and/or another tax year, in which case you must notify us before becoming entitled to all your benefits).

Voluntary Scheme Pays

The 91热爆 and the Trustee have agreed that the Scheme will meet the Annual Allowance tax charge on a voluntary basis where:

• your annual allowance is reduced because you have a high income. High income means your ‘threshold income’ in the tax year was over £200,000 and your ‘adjusted income’ in the tax year was over £260,000 (£240,000 in 2022/23).  To find out how to work our your reduced (tapered) annual allowance use the link below.
• your pension saving under the Scheme exceeds your reduced annual allowance but not the standard annual allowance;
• your total tax charge exceeds £2,000; and
• your notify us by five working days prior to 31 January in the year following the year in which the annual allowance charge relates.

The Scheme will not meet any tax charges which arise in respect of other pension arrangements.

How to request the Scheme pays your annual allowance tax charge

To request the Scheme pays your annual allowance tax charge you must complete either the Statutory Scheme Pays Notice or the Voluntary Scheme Pays Application Form (see links below). Completed forms must be received by the Pension and Benefits Centre by the relevant deadline and can be uploaded via myPension Online or sent by post. We cannot accept completed forms by email.

If you are retiring and taking your benefits from the Scheme in the tax year

In order to reduce the benefits payable from the Scheme in respect of the tax charge paid by the Scheme, the Trustee will reduce the benefits you hold under the Scheme in the following order of priority until all of the tax charge has been reclaimed. This order of priority will apply across all benefits your hold under the Scheme (for example if you have had more than one period of membership), and not to just to the benefits triggering the tax charge.

• Money-purchase funds (e.g. Additional Voluntary Contribution funds) you hold under the Scheme if you are a member of the Old Benefits or New Benefits sections.
• The Partial Refund option lump sum payable if you are an Old Benefits member and choose this option.
• Your Scheme pension being put into payment. Your pension will be reduced by converting the remaining balance of the tax charge into a pension equivalent that, in accordance with normal actuarial practice, fully reflects the amount of the remaining balance.

If you are not retiring, or retiring but not taking your benefits from the Scheme in the tax year

Any money-purchase funds (e.g. AVC funds) you hold under the Scheme, irrespective of which section of the Scheme the tax charge has arisen under will be used to meet the tax charge. Any remaining balance of the tax charge will then be treated as a notional negative money-purchase fund (more commonly referred to as a 鈥渘egative DC fund鈥�) to which any future tax charges paid by the Scheme will be added. This negative DC fund will be converted to a deduction to your benefits that is applied when you leave the Scheme, transfer your benefits to another arrangement or claim payment of your pension.

The negative DC fund will increase in line with the pre-retirement discount rate used to calculate transfer values payable by the Scheme. These rates are currently issued quarterly by the Scheme Actuary. The current rate will be used when the Scheme receives the notice to pay the tax charge, and the rate will be fixed from then until the pension is put into payment (or an earlier event). These rates represent the 鈥渂est-estimate鈥� return the Scheme was expecting to receive on the money which was used to pay the tax charge. You can find out the current rate by contacting the pension service line.

If you apply for Scheme Pays more than once, then each tax charge paid by the Scheme in excess of any money-purchase funds will increase at the rate in force at the time. This means that the negative DC fund would effectively be like a collection of loans with different interest rates applying to each 鈥渓oan鈥�.

Leaving

If you leave the Scheme and do not claim payment of your pension, then on leaving the negative DC fund would be repaid by any money-purchase funds you hold under any section of the Scheme, and any remaining negative DC fund would remain until the next event (e.g. transferring out or claiming payment of your pension).

Transferring your benefits to another arrangement

If you transfer any benefits out of the Scheme, then the amount of the negative DC fund may be deducted from the transfer value. The negative DC fund would first be deducted from any money-purchase funds, and any balance would then first be deducted from the post-1997 element of the transfer value.

Putting your pension into payment

When you take any benefits under the Scheme the negative DC fund would then be deducted in the following order of priority until all of the tax charge has been reclaimed. If the benefits being taken are not sufficient to repay the negative DC fund, the balance will remain as a negative DC fund and be deducted from future benefits taken from the Scheme.

• Money-purchase funds (e.g. AVC funds) you hold under the Scheme if you are a member of the Old Benefits or New Benefits sections (even if these are not being taken at the time).
• The lump sum payable under the Partial Refund Option if you are an Old Benefits member and choose this option.
• Your Scheme pension being put into payment. Your pension will be reduced by converting the remaining balance of the tax charge into a pension equivalent that, in accordance with normal actuarial practice, fully reflects the amount of the remaining balance.

Benefits under different sections and/or benefits

You may have benefits under more than one section of the Scheme and/or more than one benefit under any section 鈥� for  example, from an earlier period of employment with the 91热爆, or because you joined the CAB 2011 section. The intention is to always first deduct the amount of the negative DC fund from any money-purchase funds held under the Scheme and to apply the deduction at the first instance of you leaving, transferring or taking any benefits, regardless of whether the tax charge arose in respect of those benefits.

In cases where the negative DC fund cannot be repaid in full (e.g. on leaving the Scheme with a small AVC fund), the earliest payments would be repaid first.

Pension sharing on divorce

If you require a transfer value for pension sharing on divorce, the amount of the negative DC fund would be deducted from any money-purchase funds held under any section of the Scheme (with the earliest payments repaid first), and then any balance would first be deducted from the post-97 element of the largest transfer value if you have more than one benefit under the Scheme. Any money-purchase funds would actually be reduced at the point of quoting the transfer value, regardless of whether a pension sharing order was implemented. Then if a pension sharing order was implemented, the remaining negative DC fund would be reduced by the pension sharing percentage applied to the largest transfer value, and a corresponding pension debit would also be created in the usual way.

More information

The pension service line cannot give you any financial advice. You should consider taking independent financial advice before making a decision about asking the Scheme to pay your annual allowance tax charge.

For any questions about your Scheme benefits please contact our service line by emailing myPension@bbc.co.uk or calling 029 2032 2811.  To find out more about the annual allowance visit the HMRC website using the link below.