Effective Date Of Pension Contributions

leedsfan757

Hi all,

I wonder if someone might please be good enough to answer the following query?

I am enrolled in my employer's DC pension so the contributions made by myself and employer are docked from my oay on the last working day of each month.

This money then goes into hiding for 2-3 weeks before being paid into my separately administered (Mercer) pension account.

Taking pay for the month of March as an example, is this contribution considered to have been made in March (which is when it leaves my pay) or in April (which is when it lands in my pension)?

This question is also currently relevant given the change to Pension Input Period announced in the summer budget. I am, as I type, looking to increase my contributions As a result of this change but I need to know the answer to the above question before I can confidently settle on an amount.

Many thanks for reading.

xylophone

http://www.mercerhole.co.uk/tax-plus-blog/pension-input-periods-beware-the-annual-allowance-aa-reduction


http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/pensionschemes/annual-allowance/input-periods.htm

"If you do not know what your PIP is you should ask your pension scheme administrator."

leedsfan757

Many thanks for the information regarding the PIP and the LTA, much appreciated.

Does anyone have an answer to the effective date of pension contribution question also please?

Kind regards.

bigadaj

leedsfan757 wrote: »

Many thanks for the information regarding the PIP and the LTA, much appreciated.

Does anyone have an answer to the effective date of pension contribution question also please?

Kind regards.

It should be in March but you need to ask the pension provider to be sure.

leedsfan757

Thank you very much. I shall call them tomorrow.

Snakey

I thought it was when the contribution was paid to the provider (and have done my planning on the basis that March's contribution will fall into the following fiscal year for AA purposes while giving me tax relief against the current year's salary), so if that's not the case please come back to the thread to tell us!

gadgetmind

For pre-budget PIPs, it's complex, and for post-budget ones, well that's complex too!

You'll also need to read this.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/442951/Transitional_provisions_for_aligning_pension_input_periods.pdf

gadgetmind

The date of the contribution will be as reported on your pension company's paperwork or web site. Mine wander around a lot so I record them month by month.

If this date is close to your PIP, you can have anything from 10 to 14 payments in one PIP! This is why I moved my PIP to the middle of the month a couple of years ago, and more recently made all my PIPs tax year aligned.

leedsfan757

Snakey wrote: »

I thought it was when the contribution was paid to the provider (and have done my planning on the basis that March's contribution will fall into the following fiscal year for AA purposes while giving me tax relief against the current year's salary), so if that's not the case please come back to the thread to tell us!

I have asked Mercer to answer this question and they have undertaked to write to me within err 3 weeks! I shall happily post their reply here.

All the best.

leedsfan757

gadgetmind wrote: »

For pre-budget PIPs, it's complex, and for post-budget ones, well that's complex too!

You'll also need to read this.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/442951/Transitional_provisions_for_aligning_pension_input_periods.pdf

Thank you very much indeed for your reply. I am afraid the link you posted does not appear to work. Please could you try to post it again?

Many thanks.

EdSwippet

leedsfan757 wrote: »

I have asked Mercer to answer this question and they have undertaked to write to me within err 3 weeks! I shall happily post their reply here.

FWIW, I asked this of my company's pension specialists this week.

Their answer -- and they are not Mercer, but it's a data point -- was that a contribution taken from the June payroll would be "paid to the pre-alignment tax year (6 April 2015 to 8 July 2015)", even though it does not appear in the pension as an investment until 12 July. Payroll contributions from July onwards go to the post-alignment period.