GAD Limit Recalculations Due

For members with drawdown funds, the pension limits have to be calculated regularly.

New rules have been introduced from April 2011.

The limits are usually due to be recalculated on the next 3rd anniversary of the current full limit (5^th anniversary for reference periods starting before April 2011).

If a member reaches age 75 after 21^st June 2010 and before April 2011, there are special rules which the report may not incorporate.

Pre 2006 Pensions and Transfers in Drawdown

If a member has separate limits for a pre 2006 pension and a normal pension the recalculation dates are shown separately.

Similarly, the recalculation dates for any funds relating to transfers in drawdown are shown separately.

Selecting Members

All members are included if any limits are stored in the ‘Pension Limits’ grid on the Members, Pensions screen.

If the Date Flexible Drawdown Adopted (on the Members, Pensions screen – Flexible tab) is after 5^th April 2011, the member is ignored.

Archived members are also ignored.

Annuity Purchases

If an annuity has been purchased in the current pension year, Omni will look to see if the revised pension limit has been stored (with an Event Date on or after the annuity purchase date). If the revised limit has not yet been stored, the limit will be shown as needing to be recalculated at the end of the current pension year (unless the full 3 year or 5 year limit is due then). Each subfund is considered separately e.g. if an annuity has been bought using the pre 2006 sub-fund then Omni will look for a revised limit for the pre 2006 sub fund. If the annuity amount is not allocated between the subfunds, Omni assumes it relates wholly to the normal vested fund.

BCEs

If an extra BCE for drawdown has taken place in the current pension year and the revised limit has not yet been stored (i.e. there is no record where the Event Date is on or after the BCE date in the vestings record), the report will show the limit recalculation as being due at the beginning of the pension year. BCEs can only affect the normal vested fund (not pre 2006 etc). BCEs that take place in other schemes are ignored.

Updating Limits

Once the limits have been recalculated, the new limits should be entered into the ‘Pension Limits’ grid on the ‘Members, Pensions’ screen.

Data Integrity – No Limits Stored

If no limit has been stored for a member then Omni won’t be able to identify when the recalculation is due. It is advisable to run the Pension Limit Enforcement report regularly because this will identify members where a pension or lump sum payment has been recorded in the ‘Benefits Payments’ tab on Omni’s ‘Members, Pensions’ tab but no limit has been stored.