Case study

Complex benefit structure with high earners

Pensions & benefits Pensions administration Pensions tax

The background

We were appointed to provide pension administration services for a FTSE100 listed company with a complex benefit structure and a number of their members affected by 'high earner' issues.

Our solution

We identified past practice and high earner scheme specific issues as part of the implementation project including:

Carrying out Annual Allowance checks, assessing any unused allowances from preceding tax years and implementing the Scheme’s policy on limiting accrual or arranging payment of tax. Both a salary augmentation and 'Scheme Pays' policy were agreed with the Trustees and this process was documented fully in the Scheme specifics held on file for all calculations and enquiries.
Processing and monitoring members’ benefits where they have registered for protection from the various changes to the Lifetime Allowance limit.
Restricting members’ benefits to historical Inland Revenue maximum limits where required under the Scheme’s Rules.
A table confirming the benefit structure of the various categories was also agreed and signed off by the Scheme Actuary and this was used as a template for the calculation proforma and testing of automated calculations. Bespoke training was rolled out to the dedicated administration team covering the issues that directly impacted the Scheme.

The results

Our thorough knowledge of the 'high earner' issues, and ongoing support from our dedicated pensions taxation team, gave the Trustees assurance that affected members’ complex benefits will be calculated in accordance with the Scheme Rules and overriding legislation at all times.