£60K annual allowance pension contributions

NickPoole

Perhaps I should have been clear - going to partially retire in 2025/26 and take some pension benefits, so the pension inputs would be affeceted

hugheskevi

Your pension inputs are based on membership of legacy scheme for 2015-22. Each year you receive alpha and legacy scheme pension inputs based on that amount. Your future choice of benefits has no impact on these inputs.

In the year in which you retire, you again have pension input based on legacy scheme, which is the starting position. If you elect for legacy benefits then nothing changes., If you elect for new scheme benefits and those benefits result in a lower pension input, then your pension inputs for your of retirement are those lower inputs. If you elect for new scheme benefits and that results in a higher pension input for the year in which you retire, your pension inputs are instead based on legacy scheme membership which resulted in lower pension inputs.

NickPoole

ok trying to get my head round that (my fault not yours)

There are effectively 2 pension input calculations per year - legacy & new

rounding my figures at the end of 24/25 I have built up benefits of

Legacy - £21K plus £63K lump sum (based upon 25 years service including 7 years mccloud)

new - £4.5K no lump sum (about 3 years)

If I take partial retirement this year and opt for new scheme the figures become:

Legacy £15K plus £45K lump sum (based on 18 years service)

New £13K now lump sum

If I partially retire during the year, at the end of the year I would normally do a legacy calculation for pension input and new calculation for new scheme pension input and they would be added together as total pension input

Are you saying I would use only the legacy calculation - which would be negative? Or rework as though I was taking legacy benefits and use that (and for new scheme ignore the mcloud years to get that pension input)?

Am I being obtuse?

hugheskevi

There are effectively 2 pension input calculations per year - legacy & new

Only in the year of pension commencement, not per year.

Legacy - £21K plus £63K lump sum (based upon 25 years service including 7 years mccloud)

new - £4.5K no lump sum (about 3 years)

If I take partial retirement this year and opt for new scheme the figures become:

Legacy £15K plus £45K lump sum (based on 18 years service)

New £13K no lump sum

If I partially retire during the year, at the end of the year I would normally do a legacy calculation for pension input and new calculation for new scheme pension input and they would be added together as total pension input

Are you saying I would use only the legacy calculation - which would be negative? Or rework as though I was taking legacy benefits and use that (and for new scheme ignore the mcloud years to get that pension input)?

You ignore the fact you are opting for new scheme, and just calculate everything based on legacy scheme membership for 2015-22. That will be the input, except in the event that calculation of pension input under the Option B (alpha for 2015-22) set of benefits is lower than the pension input under the Option A (legacy for 2015-22) set of benefits.

You calculate inputs for both legacy and alpha scheme and add them together, but they will be different under each option.

NickPoole

hugheskevi said:

There are effectively 2 pension input calculations per year - legacy & new

Only in the year of pension commencement, not per year.

Legacy - £21K plus £63K lump sum (based upon 25 years service including 7 years mccloud)

new - £4.5K no lump sum (about 3 years)

If I take partial retirement this year and opt for new scheme the figures become:

Legacy £15K plus £45K lump sum (based on 18 years service)

New £13K no lump sum

If I partially retire during the year, at the end of the year I would normally do a legacy calculation for pension input and new calculation for new scheme pension input and they would be added together as total pension input

Are you saying I would use only the legacy calculation - which would be negative? Or rework as though I was taking legacy benefits and use that (and for new scheme ignore the mcloud years to get that pension input)?

You ignore the fact you are opting for new scheme, and just calculate everything based on legacy scheme membership for 2015-22. That will be the input, except in the event that calculation of pension input under the Option B (alpha for 2015-22) set of benefits is lower than the pension input under the Option A (legacy for 2015-22) set of benefits.

You calculate inputs for both legacy and alpha scheme and add them together, but they will be different under each option.

Brilliant, that seems clear, thanks a lot!

Just out of interest, what sort of circumstances might the new scheme input be less than legacy, if you were opting for the new scheme?

(just trying to get this stuff straight in my head)

hugheskevi

NickPoole said:

hugheskevi said:

There are effectively 2 pension input calculations per year - legacy & new

Only in the year of pension commencement, not per year.

Legacy - £21K plus £63K lump sum (based upon 25 years service including 7 years mccloud)

new - £4.5K no lump sum (about 3 years)

If I take partial retirement this year and opt for new scheme the figures become:

Legacy £15K plus £45K lump sum (based on 18 years service)

New £13K no lump sum

If I partially retire during the year, at the end of the year I would normally do a legacy calculation for pension input and new calculation for new scheme pension input and they would be added together as total pension input

Are you saying I would use only the legacy calculation - which would be negative? Or rework as though I was taking legacy benefits and use that (and for new scheme ignore the mcloud years to get that pension input)?

You ignore the fact you are opting for new scheme, and just calculate everything based on legacy scheme membership for 2015-22. That will be the input, except in the event that calculation of pension input under the Option B (alpha for 2015-22) set of benefits is lower than the pension input under the Option A (legacy for 2015-22) set of benefits.

You calculate inputs for both legacy and alpha scheme and add them together, but they will be different under each option.

Brilliant, that seems clear, thanks a lot!

Just out of interest, what sort of circumstances might the new scheme input be less than legacy, if you were opting for the new scheme?

(just trying to get this stuff straight in my head)

I doubt there will be many situations where the new scheme is a lower pension input and it is a sensible option for the member. 

I think would be very niche scenarios perhaps involving abatement and someone wanting to carry on working but also take their pension.

It would probably be more likely in public service pension schemes with lower NPAs, ie, the uniformed services.