HND FS 养老金答案.doc

Q1: You should be able to summarise and explain the entitlement to UK SBP and S2P generally.1. SBP & S2P & SERPS2. who is available to these pensions3. how to get full SBP4. NIC credits5. HRP6. married woman答案：1. source of UK state pensionThe state basic pension is the fundation of most peoples pension income. Through paying the national insurance contributions, people are qualifying to get pension at a flate rate. If contributions fall, people will get a reduced level of pension. UK state pension has two components: the basic pension (SBP) and state additional pension (S2P).The basic pension is often referred to as a first tier pension. Nearly everyone has access to SBP and they build on SBP for the rest of their retirement planning. Everyone including both employee and self-employee who has been credited with enough National Insurance contributions will get the basic pension. Different people qualifying for the full pension get the same pension, so SBP is also called flate-rate pension. Under S2P, different people get different amounts. S2P is an earnings-related pension which means the amount each person gets is according to their earnings while they were building it up. Self-employed person will not get S2P. 2. person SBP: over 96 percent of todays single pensioners and 99 percent of pensioner couples get some basic pension. 1. most employees provided they earn at least a minimum amount or are getting working tax credit 2. self employee 3. people who are being credited with NIC 4. people who volunter to pay NIC 3. ways to get full SBPQualifying year: having paid or been credited with enough NIC will counts towards a tax year in the state basic pension. This tax year can be called a qualifying year. In general, only class 1(paid by employees) class 2 ( paid by the self-employed) and Class 3 (boluntary) count towards building up basic pension. A person must have paid a whole years worth of contributions to get a qualifying year. Class 1 and Class 2 can be paid respectively or mixed covering the full 52 weeks. Working life: The tax years from the one in which you reach age 16 to the last complete tax year before you reach state pension age. One have to pay or been credited with NIC for at leasts 90 percent of the tax years in his working life in order to get full basic pension. State Pension Age: At the state pension age, people have the right to claim their state pension. This is currently at age 65 for men and age 60 for women. A persons state pension age is 65, his working life will be 49 years and his qualifying year is 44years in order to get full basic pension. Robert has contributed to an OPS of his company since 1972. until 2008, his qualifying year is 36. there are still 10 years to reach his state pension age, 65. so he just needs to get 8 qualifying years at least to reach 44 of qualifying year. So hes very likely to get full SBP.4. NIC creditsIf people dont get NIC, these years may be gaps in the National Insurance record. People might get credits by being a carer, while training and temporarily working abroad and so on. If one are getting carers allowance, she could get credits automatically. But a merried women who is a carer is not eligible for credits, she may get HRP instead of credits. Iona is a carer during her daughters first five years life. So Iona can get HRP.5. HRPHome responsibilities protection (HRP) also helps you to deal with gaps in your contribution record. HRP reduces the number of qualifying years you need in order to get any given level of basic pension. 6. Married women But HRP cant reduce the required number of years to less than 20 year. Unfair: their daughter, Ailsa, aged 28, has to work 52 weeks a year to get a qualifying year. But her mother could also get a qualifying year when she was looking after Ailsa at home. Iona gave up work for the first 5 years of Ailsas life. So she can get 5 years of child benefit according to HRP. These years for which Iona gets HRP are deducted from the normal number of qualifying years she needs.Iona can get SBP according to her own credit record. And as a married woman, she can also have a basic pension based on her husbands NIC records rather than her own. If wife has reached stata pension age, it is paid direct to her . and if the wife is under state pension age, it is paid as an adult dependency increase to the husband. In my opinion, Iona is better to get SBP according to her husbands credit record for its more likely to get full pension. Q2: Benefits of SERPS in relation to Iona 1. when it is introduced2. who is available to SERPS and S2P3. maximum target benefit provided by SERPS and S2P?答：1. The S2P used to be called the State Earnings Related Pension Scheme (SERPS). But SERPS was changed to S2P from April 2002. 2. person who is available to SERPS and S2PPeople with earnings at least equal to the LEL(84Pound a week in 2006-7) could build up SERPS. People could not build up SERPS if they were not working.But after April 2002, S2P is open to: 1. employees earning at least the LEL 2. people caring for one or more children under the age of 6 3. people who qualifying for carers allowance who is ill or disabled 4. some people who are entitled to long-term incapacity benefit and have worked for at least one-tenth of their working life Before April 2002, Iona is not belong to SERPS. But after the reform in 2002, people such as Iona caring for children under the age of 6 can build up S2P. its to Ionas advantage. 3. maximum targeted benefits provided by SERPS and S2PS2P: Basically speaking, the more you earn, the higher the S2P you can get. Because the high earners have usually contracted out for long periods, the average S2P paid out today is much lower. Under S2P, people who earn lower than LEL or who have no job but qualifying for S2P are treated as if they have earnings equal to the LEL. SERPS: Where state pension age falls on or after 6April 2009, the maximum target benefit provided by SERPS reduces to 20% of band earning. The band referred to lay between the LEL and UEL. This time is nearly Ionas retirement time. The maximum SERPS is 20% of her band earnings which means Iona will get lesser pension. Q3: OPC DC/DB as it relate to Robert1. 解释OPS2. what is DC(money purchase scheme)3. how to join OPS DC4. what are the terms? DB5. Pros and cons of DB and DC答：1. These offer a pension organised by employer, who pays into the scheme in employees behalf, though employees are usually required to contribute too. They are usually hard to beat as a way of saving for retirement. Employers are not obliged to offer OPS. And employees do not have to join, but taken part in a valuable scheme is good to retirement. We consume an employee has an OPS. If the employee has to retire because of illness or disability, he will get ill-health benefit. And if the employee reaches his pension age, he can draw tax-free lump sum and get pension at the same time. If the employee dies, there are death benefits that pension will pay for his spouse, children or anyone he has nominated.2. DC(money purchase scheme)The main alternative to salary-related schemes. The pension you get depends on how much is invested and how well the investments perform. They are easy to understand but offer no pension promise, making planning ahead for retirement unpredictable and risky. The amount of pension at retirement depends on: 1. the amount paid into the scheme 2. how well the invested contributions grow 3. the charges deducted 4. annuity rate which determine how much pension you get from the fund that has built upUnlike DB, with a money purchase scheme, your employer simply pays in s set amount in contributions. This means the employer knows just how much it will cost to provide the scheme and bears no risk of costs running out of control. For these reasons, many employers are turning away from final salary schemes and offering employees DC instead.3. how to join OPS DCAn OPS may be open to all employees. Or restrictly speaking, OPS is open to a particular group,such as one scheme for working staff and another for management. If the employer agrees to pay for his employees OPS, this employee could join OPS.New age discrimination laws have much effects on retirement ags from October 2006. employer will not have the right to retire an employee before age 65 and should consider if the employee wants to work longer when he reaches age 65. this legislation also applies to OPS but will have little pratical effect since most of the age-related rules that are part of OPSs design are exempted. 4. what are the terms DBsalary-related schemes, also known as defined-benefit(DB) will provide pension according to a formular based on employees pay regardless of the amount of he pays in and the length of time in the scheme. Employees can plan ahead for they usually know roughly how much they will get when retire. Contributions paid in are invested to build up a fund from which the promised pensions are paid. The amount a employer has to pay varies depending on how well the invested contributions grow and the cost of the pensions once they start to be paid. The general formula for working out pension of DB is :Years in scheme * accrual rate* finanal salary=pension5. PROs and ConsDB: pros: Employers bears most of the risk involved in saving for retirement in DB. Employers pay running cost and some or all of the costs of providing pensions. Employee could have tax advantages and will get predictable pension benefits. The pension they get is anti-inflation. Now Robert has the OPS of defined benefit(DB) The rumours of impending changes to DC is not good to Robert. DC: cons: employees bear all the risks because the pension and other benefits they get will be unpredictable and there is no automatic protection against inflation. Because employers pay less cost than with a DB. DC is to employers advantage. (DB 的cons: DB is difficult to understand and may lose out when changing jobs. If employers dont pay the promised contribution into the costly and risky scheme, it will close. DC 的pros: DC is simple to understand and easy to transfer if employees change jobs )Q4: limits on contribution 1. how to increase pensionIndividuals have several options to improve the situation that they get a low pension from your occupational scheme. These include making additional voluntary contributions(AVCs), and possibly joining an employers salary sacrifice scheme. People can increase their pension through paying extra contributions, starting their pension later and sacrificing salary if available. 2. in-house AVCIn house AVC is associated with OPS and paid in by employees to get further pension. In-house money purchase AVC which is a voluntary contribution has some special features that are charges and investment choice, matched contribution and taking the benefits. In house AVCs are considered to be better value than FSAVCs. 3. free standing AVCFree standing AVC is a kind of PPS but it allows employees to make further contributions aiming to top up the benefits from their OPS. FSAVC is entirely separated from the main scheme or scheme-related AVCs. 4. maximum pensin contributioninhouse AVCparent pension fund can decide how much can be paid into an in-house AVC. And employees can invest up to 15% of their earnings split between the employers scheme and the AVC. But after the 2006 A Day reform, there is no limit on how much you pay into pension scheme. However people can get tax relief only on contributions paid up to P3600 or equal to their relevant earnings.FSAVCUnlike AVCs, there can be only one FSAVC operating in any one tax year. An individual can invest up to 15% of their earnings split between the other schemes and the FSAVC. But after the 2006 A Day reform, there is no limit on how much you pay into pension scheme. However people can get tax relief only on contributions paid up to P3600 or equal to their relevant earnings. 和VAC 一样(the changes of FSAVC is the same as in house AVC)Q5: AVC in relation to RobertPension Scheme in the 1980sPension benefits and limits will be different depending on the date of joining. Approval pre-1987 applies to employees who joined a scheme of their current employer before 17 March 1987Pension Accrual RateThe maximum working life which can count for this purpose is 40 years. So the maximum pension benefit is 40/60th of final remuneration. Under pre-1987 approval conditions, is was possible for a 2/3rd final remuneration benefit. With the acceletated accrual, Robert can very likely to get the maximum benefit as a fraction of final remuneration. Inland Revenue Limits:Earnings CapThere is no monetary cap covering eranings for those subject to pre-1987 approvel conditions, so Robert dont have to worried about earnings cap.Early RetirementFrom the age of 50, members can be allowed to draw benefits from OPS at any time. There is a difference between early retirement benefit calculations post-1989 and the other two approval conditions.Under post-1989 approval conditionsThe limitations on early retirement benefits are based on the service actually completed.Under both post-1987 and 1987-1989 approval conditionsThe formula of calculating early retirement benefits is:No. of years actually worked*pension /no. of years from joining pension to the NRDLate RetirmentInland Revenue deem the late retirement date to be the NRD and calculations are made.Pre-1987It is possible to take all benefits at NRD, when the Inland Revenue limits apply in the normal way.And the fund member can defer all their benefits to any later date up to the date of the actual retirement, even if that means working past the age of 75.Tax-free cashThe cash lump sum can be up to 3/80ths of final salary. And the maximum period of services, 40 years can make the maximum cash benefit 1 1/2times of final salary. In standard calculations, 3/80ths is also used when the accrual rate was higher. Uplifted Cash BenefitsFor Robert, under the pre 1987 approvel, he can get the maximum cash benefit of 1 1/2times the final salary when completing 20years service or retiring at or after NRDQ6: PPS1. payment made directly to PPS2. expense/earning3. information disclosure答：1. PPS: The self-employed wants to save more for their retirement and they can buid up a PPS where they pay money in in order to grow it to a sizeable sum in future. Self-employed person, an employee without an OPS or an employee having an OPS but wants to top up the amount hell save for retirement have to arrange their own personal pension. Iona is not belonging to OPS. She has a state pension whose pension is low when Iona retires. In order to get more pension when retire, she can build up an PPS. 2. how much theyll getPeople in a PPS cannot know how much theyll get in advance. It depends on the contributions they paid in and how well the invested contributions grow. The deducted charges and annuity rates at the starting time of pension are also a fac