Understanding Section 44(a)

149oaks

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I'm reading the most up to date Actuarial Funding Certificate for my DB Scheme.
It sets out the Funding is sufficient to to discharge liabilities as follows:
(a) 100% of benefits as set in section 44(a)(i) of the Act
(b) 77% (ii)
(c) 44% (iii)

At a guess I think (i) is for members who have already retired and are in receipt of pension, but what are the other 2? I am a deferred member of the scheme.
 
AVC's get paid first, then those already retired, active and deferred members come in last. I'm surprised that the retirees aren't getting their full entitlement in that case.
 
Thanks Guys and just to clarify based on what I posted:

AVC's are 100%
Retirees are 77%
Deferred and Active 44%

Is this correct?
 
Below is from a certificate


EXPLANATORY NOTE – PROVIDED FOR INFORMATION ONLY AND NOT FORMING PART OF THE CERTIFICATE

This note is intended to provide clarification of the benefits that the actuary has valued in establishing the liabilities for the purposes of the certificate and assumes that the effective date of the certificate is after 22 September 2005. Section 44 of the Pensions Act, 1990, as amended, and the Third Schedule set out in detail the benefits valued.

If the scheme satisfies the funding standard, the actuary is of the opinion that the scheme would have had sufficient assets to meet specified benefits and expenses if it had been wound up. The opinion is based on the position at the effective date of the certificate.

The benefits can be summarised as follows:

(1) In respect of current pensioners -

all future benefit entitlements under rules of the scheme

(2) In respect of members not currently receiving pensions -

(a) all benefits secured by additional voluntary contributions or granted under the scheme by way of transfer of rights from another scheme, and

(b) the scheme benefits that are required by the Act to be preserved – this relates to all benefits accrued up to the effective date of the certificate and includes revaluation of benefits accrued from 1991, and

(c) the certified percentage of the additional benefits described in paragraph 5 of the Third Schedule. This normally relates to revaluation of benefits accrued before 1 January 1991.


This is S44 of the act, I think there may be a subsequent amendment.
http://www.irishstatutebook.ie/1990/en/act/pub/0025/sec0044.html


My reading is that pensions in payment are first (if they had AVC then they would be in payment anyway). Then AVC / Transfers for deferreds and actives etc
Only in a case where there were no pensions in payment would AVC and transfers in come first. I am open to correction though.

Note that in many schemes the AVC may be separate to the main fund so not relevant.
 
Thanks Guys and just to clarify based on what I posted:

AVC's are 100%
Retirees are 77%
Deferred and Active 44%

Is this correct?

I would ask for clarification. Under the current rules, pensions in payment (excluding any scheme rule increases) get priority over active and deferred members. I don't see why they don't get 100% too.

But if you are a deferred member, you can be sure that you are bottom of the pile.

Steven
[email protected]
 
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