F1SCHEDULE 4BAdditional pension: accrual rates for purposes of section 45(2)(d)
Part 1Amount for purposes of section 45(2)(d)
1
(1)
The amount referred to in section 45(2)(d) is to be calculated as follows—
(a)
calculate the appropriate amount for each of the relevant years within section 45(2)(d) to which Part 2 of this Schedule applies;
(b)
calculate the appropriate amount for each of the relevant years within section 45(2)(d) to which Part 3 of this Schedule applies; and
(c)
add those amounts together.
(2)
But if the resulting amount is a negative one, the amount referred to in section 45(2)(d) is nil.
Part 2Normal rules: employment not contracted-out
Application
2
This Part applies to a relevant year ifF2—
(a)
the contracted-out condition is not satisfied in respect of any tax week in the year; F3and
(b)
there is a surplus in the pensioner's earnings factor for the year.
Appropriate amount for year
3
The appropriate amount for the year for the purposes of paragraph 1 is either—
(a)
the flat rate amount for the year (if F4the pensioner's earnings factor for the year does not exceed the LET), or
(b)
the sum of the flat rate amount and the earnings-related amount for the year (if F5that earnings factor exceeds the LET).
4
The flat rate amount for the year is calculated by multiplying the FRAA in accordance with the last order under section 148AA of the Administration Act to come into force before the end of the final relevant year.
5
The earnings-related amount for the year is calculated as follows—
(b)
multiply that amount in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c)
multiply the amount found under paragraph (b) by 10%;
(d)
divide the amount found under paragraph (c) by 44.
Part 3Contracted-out employment
Application
6
This Part applies to a relevant year if F8—
(a)
the contracted-out condition is satisfied in respect of each tax week in the year; F9and
(b)
there would be a surplus in the pensioner's earnings factor for the year if section 48A of the Pension Schemes Act 1993 did not apply in relation to any tax week falling in the year.
Appropriate amount for year
7
The appropriate amount for the year for the purposes of paragraph 1 is calculated as follows—
(a)
calculate amounts A and B in accordance with paragraphs 8 to 10;
(b)
subtract amount B from amount A.
Amount A: assumed F10earnings factor not exceeding LET
8
(1)
Amount A is calculated in accordance with this paragraph if F11the pensioner's assumed earnings factor for the year does not exceed the LET.
(2)
In such a case, amount A is the flat rate amount for the year.
(3)
The flat rate amount for the year is calculated by multiplying the FRAA in accordance with the last order under section 148AA of the Administration Act to come into force before the end of the final relevant year.
Amount A: assumed F12earnings factor exceeding LET
9
(1)
Amount A is calculated in accordance with this paragraph if F13the pensioner's assumed earnings factor for the year exceeds the LET.
(2)
In such a case, amount A is calculated as follows—
(b)
multiply that amount in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c)
multiply the amount found under paragraph (b) by 10%;
(d)
divide the amount found under paragraph (c) by 44;
(e)
add the amount found under paragraph (d) to the flat rate amount for the year.
(3)
The flat rate amount for the year is calculated by multiplying the FRAA in accordance with the last order under section 148AA of the Administration Act to come into force before the end of the final relevant year.
Amount B
10
(1)
Amount B is calculated as follows—
(a)
(b)
multiply that amount in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c)
multiply the amount found under paragraph (b) by 20%;
(d)
divide the amount found under paragraph (c) by the number of relevant years in the pensioner's working life.
(2)
Section 44B is to be ignored in applying section 44(6) for the purposes of this paragraph.
Part 4Other cases
11
The Secretary of State may make regulations containing provision for finding for a tax year the amount referred to in section 45(2)(d)—
(a)
in cases where the circumstances relating to the pensioner change in the course of the year, and
(b)
in such other cases as the Secretary of State thinks fit.
Part 5Interpretation
12
In this Schedule—
F18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“the contracted-out condition”, in relation to a tax week, means the condition that any earnings paid to or for the benefit of the pensioner in that week in respect of employment were in respect of employment qualifying him for a pension provided by a salary related contracted-out scheme (within the meaning of the Pension Schemes Act 1993);
“the FRAA” has the meaning given by paragraph 13;
“the LET”, in relation to a tax year, means the low earnings threshold for the year as specified in section 44A above;
“the QEF”, in relation to a tax year, means the qualifying earnings factor for the year;
F19“the pensioner's assumed earnings factor”, in relation to a year, means the earnings factor that the pensioner would have for the year if section 48A(1) of the Pension Schemes Act 1993 did not apply in relation to any tax week falling in the year;
“relevant year” and “final relevant year” have the same meanings as in section 44 above;
F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
(1)
“The FRAA” means the flat rate accrual amount.
(2)
That amount is £72.80 for the flat rate introduction year and subsequent tax years (but subject to section 148AA of the Administration Act).