Planning ahead

jamesd

The pension input amount (PIA) is the calculated increase in the value of your pension benefits based on the extra time as a member and the pay calculation.

In your case there are three parts that make up your pension:

1. What looks like 1/80th of your final salary for each eligible year worked. The number of years counting for this doesn't seem to be increasing but its value increased a lot because of the pay rise.

2. What looks like 1/60th of your final salary for each eligible year worked. The number of years counting for this doesn't seem to be increasing but its value increased a lot because of the pay rise.

3. The career average (CARE) part that is increasing the number of years counting with extra service, you can see it going from 01/000 to 02/000 then 03/000. The big jump to 2678.02 was because of the pay rise and assuming the rise stays, the average pay will also rise.

Your pension entitlement under all three is added to give the total pension income of 15584.27 so far. That's multiplied by an agreed valuation factor of 16 to get its capitalised value and the lump sum is added. So 15584.27 x 16 + 23016.44 gets you the most recent benefit value of 272364.76. The same calculation is done for last time to get the opening vale for the year. The difference between the two values is the pension input amount that's checked against the annual allowance.

Unless you get more similar pay rises to produce PIAs above 40000 you won't have any problems with the annual allowance. If you see one above that you can ask us to check that you're still OK. Going over the annual allowance plus unused allowance from the past three years just means there's a tax charge to pay.

Escapar2020

Thanks jamesd