Calculator to Show Maximum Commutation Without Incurring Tax liabilites
CIRCULAR 2011HOC0199SS
27th April 2011
TO: BRIGADE SECRETARIES
Cc REGIONAL PENSION CO-ORDINATORS
Dear Brother/Sister,
You will be aware that Firefighters’ Pension Scheme Circular 6/2011 introduced new uprated commutation factors, for the 1992 Firefighters’ Pension Scheme, to be implemented from 19th April 2011. In addition to this it also highlighted that in some circumstances an individual wishing to commute their annual pension may now incur a tax liability.
The purpose of this circular is to introduce a simple calculator which has been designed to highlight to an individual the maximum lump sum available without incurring tax liability. (There may be some individuals who still decide to commute the maximum despite the tax liability. The purpose of the calculator is not to influence any decision just to provide information to support any assessment).
It is very important however that Individual check all these details with their pension administrator before making any decision.
It should also be noted that if you have a commutation factor less than 20 or retired using the rule of 75, where your lump sum has been restricted to provide an amount no greater than two and a quarter times the full amount of pension before commutation, you will not reach the tax threshold and you do not need to use the calculator.
The calculator will shortly be available on the FBU website http://www.fbu.org.uk/ along with the new commutation factors, with instructions on how it should be used.
