CII 2024

Maximum tax relievable contributions possible

The higher of:

• Earnings

• £60,000

If you earn £65,000 you can contribute £65,000

Contributions are limited to earnings

HMRC states recycling is

1. Take PCLS

2. Make a significantly higher contribution because of this PCLS

3. the extra contribution exceeds £7500

4. Pre/planned

If you leave an occ scheme within 2 years what happens

Refund of contributions but

• First £20,000 (taxed 20%)

• £20,000 above (taxed 50%)

Revaluation rate for deferred DB members

Either:

• Pre 2009 service - (5%)

• Post 2009 service - (2%)

Or

If inflation lower use that

I.e. if inflation is 2% use that and not 2.5% or 5%

What’s a deferred DB member

Someone who was in a DB scheme and left that employment but hasn’t taken pension yet

Their benefits are just sitting there and revaluing until retirement

What are the technical provisions of a DB scheme

Tech prov means - (How much scheme needs today to pay all promised future pensions

So it’s the value of a DB pension schemes liabilities

The maximum PCLS of public sector DB schemes

120/80ths final pensionable salary

Accrual rates in DB schemes

Tell you how much pension you earn each year

For every year worked you earn 1/80th

For every year also get 3/80ths of salary as a TF lump sum

DB accrual example (salary £40,000, years 20)

20 × (1/80 x £40,000)

20/80 x £40,000

= £10,000 per year

As it’s based off:

• Length

• Salary

• Accrual

DB TF lump sum accrual example (salary £40,000, years 20)

20 x (3/80 x £40,000)

60/80 x £40,000

= £30,000 lump sum

working out annual allowance and carry forwards

Employer contributions are not limited by earnings - only:

• £60,000

• Carry forward

Use last 3 tax years

Be careful as in 2023 and before AA was £40,000