HND 养老金.docx

1. state basic pensionUntil 2002, National insurance contribution had to be paid for 90% of a persons working life to be able to claim 100% of the state basic pension.Form 2002, the amount of basic pension payable depends on the number of qualifying years.A male will need 44 qualifying years to get a full SBP but a female only need 39 qualifying years. From 2010, the state pension age is 65 for both men and women that mean men and women will need same number of qualifying years. I.e. 30 years.A qualifying year is a year in which the taxpayer has received qualifying earnings of at least 52 times the Lower Earning Limit (LEL). In 2007-2008, the full State pension is 87.30 a week for a single person and 139.60 a week for a couple.In the case, Iona now is working as self- employed, so that she doesnt qualify to get full SBP but other benefits. Robert has been working for the same company more than 37 years and he has contributed to his companys contracted- out Occupational Scheme since 1972, so when he reach his qualifying years (44), he enable to get full SBP.Home responsibilities protection is a part of SBP. In the case, Iona gave up work for the first 5 years of Alisas life before going back to work. And she was looking after children and receiving Child Benefit. Home responsibilities protection placed with weekly credits. Children up to age 12 and children benefit. Married womens pension is payable before husband takes his pension.In the case, Iona doesnt qualify a basic state pension in her right on reaching state pension age; she may be able to get a basic state pension based on Roberts National Insurance Contribution. She may be able to get a BSP of up to 52.30 (in 07/08). But she couldnt receive a BSP on Roberts NIC unless he is drawing his State Pension.2. State second pension State Earnings Related Benefits Scheme (SERPS) was introduced in the 1970s to provide a level of earning-related pension benefit on top of the SBP. SERPS should have provided a partial replacement of band earnings. The Upper Earning Limit (UEL) is between 7 and 8 times the LEL. Relating to the case, Iona can have some benefit from SERPS because she earned income was less that the LEL paid no NIC, therefore did not qualify for basic pension and could not, but qualifies for SERPS benefits. And Iona is a married woman, she continued to pay reduced rate NICs.On SERPS first existence in 1978, it had a maximum target benefit of 25% of band earnings (earnings between the LEL and the UEL). The maximum target benefit of the band earnings figure was not available in full during the early years of SERPS. Because of the Demographic Pressure, the state pension age fall on or after 6 April 2009, the maximum target benefit provided by SERPS reduces to 20% of band earnings.The main benefits of state second pension:One of the steps taken was to replace SERPS with S2P as from April 2002. Like SERPS, S2P is available only to employees who over the LEL and also like SERPS, the self- employed are not eligible合格的。A new list of beneficiaries （受益者） is now included under S2P.a. Certain disabled people and careers, who are treated as if earning 11600pa.b. individuals who are entitled to有权 invalid 病人 care allowance or severe严重 disablement allowance.C. those who are entitled to long term incapacity benefit. D. people whose earnings are below the LEL, but are in receipt 收到 of CB for a child under six.Contracting out of SERPS and S2P.When SERPS was introduced in 1978, it was not made compulsory. This meant that occupational pensions providing benefit that were often significantly better than those which could be accrued增加 under the state arrangements could continue to the advantage of both employee and the government. 政府不再愿意承担人民的养老金，把养老金外包给企业。In return for being contracting out， E.g. Not being so much of a burden on the government, NICs are reduced. 政府减少负担. Contracting- out is allowance only from SERPS/S2P, which means that this is an option that applies only to employee and not to the self-employed. It is not presently possible to contract out of the SBP. A Guaranteed Minimum pension (GMP) had to be provided, which provided evidence that benefits under the private pension arrangement would at least equal those given up under SERPS. 为了鼓励外包， 政府承诺最底保障。Schemes needed to meet the Requisite Benefit Test. Only the schemes that provided benefit at least equal to 1/80 of final salary.There are 3 types of contracting out method.Firstly, new test for contracted out salary related schemes (COSRSs), this is the safest way and less risk. Others are Money Purchase (defined contribution) occupational schemes and personal pension arrangements. Money purchase occupational schemes have high risk but high return.In the case, Robert has contributed to his companys contract-out occupational pension scheme.3. Limits of provisions stated in the HM Revenue (2007-2008)Controlling directors. There are directors who own or control at least 20% of the voting capital of a limited company. In the case, Robert is a sales director and earns an annual salary of 5300. he can exercise significant control over both remuneration and pension contribution.Normal retirement date. NRD is usually between 60 and 75, that is, the date at which the individual is expected to retire. However, certain occupation is expected by the HMRC as being ones where early retirement is considered to be the norm.Pension accrual rare. 到期费用 the additional to the pension benefit may be provided at a rate that does not exceed 1/60 of final remuneration for each year of service. The maximum pension benefit is 40/60 of final remuneration. An individual may not be able to complete 40 years service by NRD. They can not achieve maximum benefits on the 1/60 scale. Tax-free cash. The cash lump sum can be up to 3/80 of final remuneration for each year. For this calculations 40 years, which makes the maximum cash benefit 1.5 times final remuneration. In standard calculations, 3/80 is used even if the accrual rate was higher (1/60).Death in service. Benefit may be in the form of a lump sum and spouses and dependents pension.4. Carry back allows relief on a contribution that is paid in the current tax year to be carried back to the immediately preceding year.Time limits are:1. An election must be made at or before the time the contribution is paid.2. The contribution must be paid by 31 Jan in the tax year concerned.3. Therefore, carry back is not available for any contributions paid between 1 Feb and 5 April in any tax year. Carry back option was stopped in 2002 and not available any more. Although the carry forward facility had been available since 1980, it was abolished on 6 April 2001.5. Defined contribution scheme (money purchase scheme), under this scheme, the benefits to which member will be entitled at retirement are based on:1. The amount of contribution that both employer and employee make to the scheme.2. The investment performance of those contributions.3. Any charges that may apply to the scheme.In the case, Ionas boss Jean is going to make a commitment to contribute to Ionas pension. She would better to choose money purchase scheme. Because the employers burden is lighter because the cost of the scheme are more predictable, and there is more scope to change the level of contribution. Furthermore, a money purchase scheme is not open-ended as for as employers are concerned, this type of retirement plan is more appealing to them. The appeal lies in the level of the employers financial commitment compared to a final salary pension. Smaller companies find it easier to control long term costs and therefore benefit to a greater degree.Defined benefit scheme known as final salary scheme. The benefits are based on salary at or around, the date of retirement. Most schemes guarantee payment of a fraction of the final salary. Employer takes financial risk. The cost to the employer is often described as open-ended. Defined contribution scheme known as money purchase scheme. Benefits are fully dependent on the value of the investment fund at the point of retirement. Each member takes financial risk. It often described as having closed- ended liability. But the 2 schemes are both run and operated by employers. Contribution, made by both the employer and the employee, will receive tax relief. The fund will pay no tax on its investments. 6. Personal pension are principally meant for individuals who are not covered by a pension scheme provided by an employer or who are self-employed.Personal pensions may be provided by:1. An authorized corporate director of an Open-ended investment company.2. Authorized unit trust managers.3. Banks.4. Building society.5. Insurance companies.The scheme is constructed as follows:1. A trust is formed by the pension provider;2. The terms and conditions of scheme membership are made available to the public.Relevant earnings means:1. Earned income including the taxable portion of benefit in kind.2. Taxable profits from the trade, profession pr vocation of a sole trader.In the case， Ionas boss- Jean is going to contribute commitment to her pension scheme, it is as benefits in kind. In the case, Robert and Iona both age 50 to 55, so the maximum contribution as 30% of Net Relevant Earnings. Net relevant earnings means relevant earnings after deducting allowance, losses or business capital allowance. Employers contribution： Although not forming part of an occupatio