POTENTIAL PITFALLS OF PENSION PLANNING
Synopsis: The current Judicial Pension Scheme is not a Registered Pension Scheme, however, the new one being introduced in April 2015 is.
Date posted: Friday, February 27, 2015
The current Judicial Pension Scheme is not a Registered Pension Scheme, however, the new Judicial Pension Scheme 2015 being introduced on 1 April 2015 is a Registered Pension Scheme and membership of the scheme will result in individuals breaching any election for enhanced protection or fixed protection 2012/14.
Judges will fall into one of the following groups:
- Transitional Protection – Cannot become member of NJPS 2015 and remain in current arrangements until retirement;
- Tapering Protection – Eligible to (and opt to) remain in current arrangements until an age related date later than 1 April 2015, then become member of NJPS 2015;
- Eligible for (and opt for) Transitional Protection Allowance, therefore no NJPS 2015 membership;
- Automatic membership of NJPS 2015 from 1 April 2015 (earlier service under current arrangements);
- Opt out of NJPS 2015; or
- Excluded from pension scheme membership by their terms and conditions.
- Transitional Protection Allowance
- The new scheme offers a Transitional Protection Allowance (TPA) element of the options exercise will apply to those judges who were either in service or whose appointment had been agreed at 1 April 2012 who meet all the following criteria.
- The relevant criteria are:
- The individual is required to move into the NJPS 2015;
- The individual has had continuous membership of the judicial pension scheme since first being eligible to join it and are still active members of the scheme at 31 March 2015;
- They can provide proof of having registered with HMRC for either Enhanced Protection (EP) under Finance Act 2004 or Fixed Protection (FP) under Finance Act 2011 and has not contacted HMRC to revoke such Protection; and
- The individual has not taken any action which negates the validity of their Protection (for instance, joining a registered pension scheme or making contributions to a registered money purchase pension arrangement after 5 April 2006 (EP) or making contributions or building up
- Benefits in a registered pension scheme after 5 April 2012 (FP).
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