BGCM EC May 2017

16.

LIMITS ON BENEFITS

Under the Scheme rules

The maximum amount of pension that you can build up under the Scheme rules is two-thirds of your Final Pensionable Pay. You should note that:

 This limit applies to the benefits you are entitled to whether or not you choose to give up part of your pension for a lump sum: the limit applies to your pension before any pension is exchanged for a cash lump sum.

 This limit does not apply to any additional benefits that you accrue by paying AVCs.

 If you carry on working after Normal Retirement Age and defer your pension instead of drawing it, the limit applies to the pension you accrued at your Normal Retirement Age. The actuarial increase described in Section 6 will not be affected by this limit.

Your Final Pensionable Pay will be adjusted in some cases, if the adjustment increases the amount of your pension. It will be the highest of:

 the total of your salary, and the three year average of any taxable element of your pay which is not of a fixed amount (such as any overtime pay you receive)

 if you retire at your Normal Retirement Age, the amount calculated in the same way but at a date up to five years before you Normal Retirement Age

 your highest average annual salary for any three of the last ten years ending with the termination of your Pensionable Service, added to the highest average of any taxable element of your pay which is not of a fixed amount (such as any overtime pay you receive) for any three of the last ten years ending with the termination of your Pensionable Service.

In calculating your Final Pensionable Pay, any reduction in remuneration as a result of ill- health will be disregarded.

Tax limits imposed on the Scheme

The Finance Act 2004, which came into force on 6 April 2006, changed the way in which members are able to build up and take their pension benefits. The two principal ways in which pension limits are now determined are by reference to the Lifetime Allowance (which limits the overall benefits payable in respect of a member), and the Annual Allowance (which limits the amount of pension benefits you can build up in any one year).

The Lifetime Allowance

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