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   Barber v GRE (1990)    BR 19 form    Benefits in kind
   Brooks v Brooks (1995)    BR 20 form    Best advice rule
   Burrow v Burrow (1999)    Bulk transfer    Buyout policy

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Barber v Guardian Royal Exchange (1990)
Mr. Barber was an employee of Guardian Royal Exchange (GRE) and a pension scheme member. The GRE pension was established as a contracted out non contributory scheme with a normal pensionable age of 62 for men and 57 for women. On redundancy an immediate pension income would be paid at age 55 for men and 50 for women.

Mr. Barber was made redundant at the age of 52 receiving cash benefits and statutory redundancy payments but was not entitled to the GRE retirement benefits due to his age in contrast to similarly aged women that would receive an immediate pension. Mr. Barber complained that this difference was sex discrimination and in breach of article 119 of the Treaty of Rome concerning equal pay for equal work.

The case was referred to the European Court of Justice (ECJ) that subsequently held that the GRE could not lawfully refuse an immediate pension to Mr. Barber through the employers pension scheme. The ECJ decision was that pay for the purpose of article 119 of the Treaty of Rome does include an occupational pension scheme. It was held that the Barber judgment would apply only to pensionable service after 17 May 1990 and that equalisation rules for the retirement age of men and women must be equalised to the lower age for accrued members pension rights or any chosen age for future rights.

With the continued development of equal opportunities, the Treaty of Amsterdam broadened the definition of 'equal pay' in article 119 amended to 'equal pay for male and female workers for equal work or work for equal value' in article 141 and effective from 1 May 1999.


Benefits in kind
In addition to a basic salary, an employer will often make other payments to an employee such as overtime and bonuses. Also, the employer may provide benefits in kind such as a company car and payment of medical insurance premiums. Cash payments to an employee such as overtime will be reflected in the employers year end tax returns and the P60 issued to the employee.

The value for tax purposes of benefits in kind will be reflected on the form P11D benefits. All the remuneration described above can be used to frank pension contributions by the employee. Occupational pension schemes offer group additional voluntary contribution (AVC) facilities although, for employees earning less than £30,000, they may be better advised to direct their additional contributions to stakeholder pensions as there is the opportunity to commute part of the pension income to a tax free lump sum.


Best advice rule
Under the Financial Services and Markets Act 2000 (FSMA), formally the Financial Services Act 1986 anyone selling or advising on investments and pensions must give clients and prospective clients best advice. This means the adviser will need to be aware of the client's circumstances and show where possible that the recommendations are based on an unbiased evaluation of what is best for the client.


BR 19 form
By submitting this to the Benefits Agency it is possible to obtain a statement of retirement benefit, up to 4 months prior to state retirement age. The statement will forecast expected basic pension plus state earnings related pension scheme (SERPS) based upon contributions made to date and likely future contributions.


BR 20 form
By submitting this to the Benefits Agency it is possible to obtain a lump sum valuation of state earnings related pension scheme (SERPS).


Brooks v Brooks (1995)
The couple married in 1977 and the case was first considered by the District Court in October 1992. The couple operated a successful family business where a small self administered scheme (SSAS) represented a significant part of the family assets. Mrs. Brooks was employed by the company and was eligible to receive significant benefits within the flexibility of the SSAS.

The court held that the SSAS was a post-nuptial settlement and therefore formed part of the matrimonial assets. The Judge awarded non-member pension benefits to Mrs. Brooks of £76,000 from the SSAS. On appeal the High Court, then the Appeal Court and finally the House of Lords all upheld the decision.


Bulk transfer
For an employers pension scheme a bulk transfer of the assets and liabilities other than on winding up could occur if; the employer closes a scheme such as a final salary pension to new entrants in favour of a money purchase scheme and offers an existing scheme member with accrued retirement benefits the option of a pension transfer or if part of the business is sold to a new employer the members pension rights will be protected by regulations although any future retirement benefits may not be maintained at previous levels.

Where a sale takes place the consent of the scheme member is required although an individual could instead choose a pension transfer to a personal pension, section 32 policies or no transfer at all. If the scheme is in surplus, on a bulk transfer the new scheme trustees will take responsibility for this amount. If the new scheme is underfunded, this surplus would help the scheme to meet the minimum funding requirement (MFR).

A bulk transfer could be achieved without the consent of members, however rarely occur due to the restrictions of the Preservation of Benefits Regulations 1991 and the restrictions imposed by the scheme rules.


Burrow v Burrow (1999)
The couple married in 1978, separated in 1994 and at the time of divorce they had two children. The total value of matrimonial assets exceeded £1,000,000 with the family home worth £400,000, the husband's interest in a company worth £275,000 and the husbands pension fund worth £265,000. The District Judge ordered the sale of the family home with £349,000 going to the wife with maintenance of £1,200 per month from the husband's income of £3,000 net per month.

There was also an earmarking order for half of the maximum possible tax free lump sum from the husband's pension and half of his annual pension income. The husband appealed against the earmarking order and this was allowed against the pension income only, as per the Matrimonial Causes Act 1973 (MCA 73) stating that an even split between the parties was not appropriate.


Buyout policy
An early leaver with a deferred pension can use a buyout policy to transfer from an occupational pension scheme. Under the Finance Act 1981, an employee can take out a deferred annuity policy through an insurance company.

This policy will be similar to a personal pension except that it will retain the occupational pension scheme regime with regard to the Inland Revenue maximums for the benefits taken at retirement age. The annuity must match the guaranteed minimum pension (GMP) if the occupational scheme is contracted out of the state earnings related pension scheme (SERPS).

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