The first revision of the fourth edition of the Principles for Calculating Pension Loss has just been released.
The addendum summarises the key changes as follows:
- The change to the statutory discount rate in the summer of 2019 (from minus 0.75% to minus 0.25%) has been reflected in the text and in the relevant worked examples in Appendix 3.
- References to rates of tax and of state pension have also been updated to current figures in the text and in Appendix 3.
- The approach to claims for compensation for loss of state pension rights has been modified to take account of national insurance credits. The circumstances in which such an award may be appropriate are limited.
- The methodology for grossing-up over more than one tax band has been refined and the relevant worked examples modified accordingly. Appendix 3 now begins with a note on grossing-up.
- The explanatory notes about public sector pension schemes in Appendix 1 now cover the Universities Superannuation Scheme.
- The extracts from the Ogden Tables found in Appendix 2 have been refined and updated. They incorporate the new discount rate. In addition, the tables now provide figures for each retirement age from 55 to 75, removing the need for interpolation calculations. Finally, they have been pre-adjusted by two years, to recognise the greater life expectancy of members of occupational pension schemes, which will make identification of the current multiplier much easier.