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   E
   Exempt person    Exempt professional firm    Executive pension plan
   Expert evidence    Exempt approved schemes    Exempt regulated activities
   External transfer        

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Executive pension plan
Taken out by senior executives or directors, executive pension plans (EPP) are occupational pension schemes provided by the employer and operated by a life assurance company. The employer will provide a contribution for the member that is deductible against corporation tax. An EPP is regulated by the Occupational Pensions Regulatory Authority (OPRA) and will have to pay the general levy unless the plan is written with one member, in which case it will be exempt.

Although an EPP can be established in addition to any employers pension scheme it will still be subject to Inland Revenue retirement benefit maximums, which are 2/3rds pensionable earnings. An executive pension plans are a defined contribution schemes so whether the member can realise these Inland Revenue maximums will be dependent upon contributions made and investment returns.

At retirement the individual can use the pension fund to buy an annuity and has the option to use an open market option to search for the highest pension annuity. Once you have purchased an annuity it cannot be changed, so learn more about annuities, compare annuity rates and before making a decision at retirement, secure a personalised annuity quote offering guaranteed rates.


Exempt approved schemes
Occupational pension schemes derive their tax privileges from the Income and Corporation Taxes Act 1988 (ICTA 88). Exempt approval is awarded by the Inland Revenue to occupational pension schemes allowing the provision of benefits up to the maximum levels as set out in the Inland Revenue practice notes (IR12).

To be recognised as exempt approved schemes they must; be established under irrevocable trust; have a UK resident administrator; have employer contributions to the scheme; and the scheme must comply with the Practice Notes. An approved scheme is rarely used due to the extremely rigid nature of its structure.


Exempt person
A person who is exempt from the general prohibition in respect of that activity as a result of the Financial Services and Markets Act (Exemptions) Order 2000; being an appointed representative; or section 285(2) or (3) of the Act (Exemption for recognised investment exchanges and clearing houses); as defined in section 417(1) of the Act (definitions).


Exempt professional firm
This is a person to whom, under section 327 of the Financial Services and Markets Act 2000 (FSMA), the general prohibition does not apply. Exempt professional firms can carry on certain exempt regulated activities that are subordinate to and derived from their professional services, under the supervision and regulation of a designated professional body.


Exempt regulated activities
Under the Financial Services and Markets Act 2000 (FSMA) regulated activities that may be carried on by members of a profession, which is supervised and regulated by a designated professional body (DPB) without breaching the general prohibition.


Expert evidence
The court has the power through rule 2.61C of the Family Proceedings Rules applies the Civil Procedure Rules 1998 part 35 to the use of expert evidence (whether written or oral) to determine a fair value for retirement benefits of a members pension rights, other than the cash equivalent transfer value (CETV), where such expert evidence will not be permissible without the courts approval.

As the introduction of expert evidence could increase the costs associated with the divorce, the court can use its powers to limit any excessive use of experts. In most cases projections from providers or a suitably adjusted CETV (reflecting the circumstances and specific needs of the parties) supplied by a pensions consultant will be sufficient to establish a fair value for more complicated pension arrangements, such as an employers final salary pension or public service scheme.

The parties should appoint a single pensions expert that will be instructed jointly to value the pension arrangements, as this will keep the costs down. The court should be made aware of the pension arrangements and the pensions expert at the first appointment. Where the parties are unable to agree to a single joint pensions expert the court has the power under part 35 of the Civil Procedure Rules 1998 for expert evidence to be provided by one expert only.

The court procedure rules will approve the use of expert evidence if it is reasonably required, or justified, or where the pension arrangements form a significant part of the matrimonial assets and are particularly complex in nature. Rule 2.51B of the Family Proceedings Rules 1991 sets out the overriding objective of the court of 'ensuring that the parties are on an equal footing dealing with the case in ways which are proportionate to the amount of money involved and to the complexity of the issues and to the financial position of each party'.


External transfer
Where a pension sharing order has been made and the former spouse is not able to make an internal transfer to the members scheme because dual membership is not permitted, an external transfer must be applied to the pension credit.

For an occupational pension scheme that is subject to the minimum funding requirement (MFR), the pension credit may be reduced if the scheme is in deficit. If the scheme is under funded the former spouse must be advised of this by the scheme trustees and has the choice to delay an external transfer until the scheme returns to fully funded position.

For unfunded public service schemes external transfers are not possible but private unfunded unapproved retirement benefit schemes (UURBs) can offer an external transfer. If the former spouse has failed to indicate how they wish to apply the pension credit, the scheme trustees can make an external transfer without their permission.

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Single
  55 £4,164  
  60 £4,625  
  65 £5,370  
  70 £5,980  
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  55 £3,918  
  60 £4,367  
  65 £4,895  
  70 £5,348  
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