Allen & Overy Pension Scheme
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Glossary of Terms
 
Additional Voluntary
Contributions (AVCs)
Annual Allowance
Money Purchase Annual Allowance
Tapered Annual Allowance
Core Contributions
Ordinary Contributions
Matching Contributions
Dependant
Earnings Cap
Incapacity
Lifetime Allowance
Minimum Pension Age
Normal Retirement Date
Paid Absence
Pensionable Salary
Pensionable Service
Pension Input Period
Retirement Account
Salary
Spouse

The contributions which you can choose to make in addition to any Ordinary Contributions. These contributions will not be matched by Allen & Overy.

The Annual Allowance (AA) is the amount of pension savings that can be made in a single tax year before extra tax is payable. The AA for the 2016/17 and 2017/18 tax years is £40,000 for most people, but it will be less for those whom the pensions tax regime deems to be on "high income". Broadly speaking, if your total taxable income is above £110,000 (which includes any taxable income from outside of your Allen & Overy employment) in a tax year, then you could have a personal AA which is below £40,000. The Firm as your employer does not have visibility of all your income so you will need to calculate what your personal AA limit is. Please see the Money Purchase Annual Allowance and Tapered Annual Allowance definitions.

This is currently set at £4,000. This lower allowance will apply if you have accessed any pension savings using one of the new flexibilities introduced from April 2015, for example setting up a drawdown facility from pension savings.

If this is the case you will have been informed by your pension provider that you have triggered the Money Purchase Annual Allowance.

If you are still a contributing member you must pass this information on to our administrators, Capita as soon as possible.

The tapered Annual Allowance (AA) was introduced for high earners from April 2016. It is based on adjusted annual income including both the individual and the employer’s pension contributions: (before April 2020), for every £2 of adjusted income over £150,000, the AA was reduced by £1, down to a minimum of £10,000 for those earning over £210,000. Members with income excluding pension contributions below £110,000 were not subject to the taper (this was intended to protect individuals with lower normal salaries who might otherwise be brought within the scope of the taper by occasional spikes in employer pension contributions).

From 6 April 2020, the two thresholds mentioned above were raised by £90,000. For every £2 of adjusted income over £240,000, a member’s AA will be reduced by £1; the minimum AA was also reduced to £4,000. The taper now affect individuals with adjusted income between £240,000 and £312,000. Anyone with income below £200,000 (excluding pension contributions) would not be affected by the taper. Although this change was triggered by issues in the public sector, it applies across the board.

The HMRC policy paper is available here.

The contributions that Allen & Overy credits to your Account on an age related scale.

The basic contributions that you can make which are matched by Allen & Overy.

The contributions that Allen & Overy credits to your Account to match your Ordinary Contributions.

Your spouse, or a civil partner (registered in accordance with the Civil Partnerships Act 2004) and anyone whom the Trustee agrees is financially dependent on you at the time of your death.

The amount of your Pensionable Salary which is capped. The amount of the cap is a notional amount based on the Earnings Cap set by HMRC in tax years up to 5 April 2006. This is reviewed annually and for the tax year 2018/19 is £160,800.

A physical or mental deterioration which is sufficiently serious to prevent the individual from following his or her normal employment, or which seriously impairs his or her earning capacity. It does not mean simply a decline in energy or ability.

Is the overall amount of pension benefits you can have without triggering a special tax charge. Benefits built up across all of your registered pension arrangements - not just the Scheme - will count towards this limit. The benefits that count towards the limit will be valued in different ways, depending on the kind of arrangement in which they have been built up and whether or not the benefit is already in payment.

The current Lifetime Allowance is £1,055,000 for the 2019/20 tax year. Individuals may build up benefits in excess of the Lifetime Allowance but the excess value will be subject to an effective tax charge of 55%.

The minimum age of 55 under legislation that retirement benefits can be taken (other than on grounds of Incapacity).

Is your 65th birthday. A DC member who joined the Scheme before 1 April 2010 has the right to retire at age 62.

Except maternity/paternity or Adoption Absence
is any period of absence authorised by Allen & Overy for any reason during which you receive remuneration from Allen & Overy. It does not include a period of membership during which you are in receipt of benefits from Allen & Overy's Permanent Health Insurance Scheme (PHI).

 

Is fixed on 1st January each year for the following twelve months and is the annual rate of basic salary payable on that 1st January. All other kinds of emolument including overtime, awards and bonus payments are excluded from Pensionable Salary. Your Pensionable Salary each year must not exceed the Earnings Cap which applies on that 1st January. If you do not have a salary at 1st January, your Pensionable Salary will be the salary which applies to you on the first day or your employment. If you are on maternity/paternity or adoption leave on 1st January, your Pensionable Salary will be the basic salary you would have been receiving had you not been on maternity/paternity or adoption leave

The period that you have been an active member of the Scheme since your date of being auto-entrolled to the scheme, (or since you elected to join if before 1 May 2008).

The Pension Input Period is the period (PIP) in which contributions paid by you or on your behalf are assessed against the Annual Allowance.

This has historically been the calendar year to 31 December. However with effect from 8 July 2015, the Government changed this for all schemes so that it would align with the tax year

For the 2015/16 tax year the Annual Allowance was assessed based on contributions paid between 1 January 2015 and 8 July 2015 and separately for 9 July 2015 to 5 April 2016.

From 6 April 2016 the Pension Input Period is concurrent with the tax year. The last contribution included in a PIP year will be your February contribution, which is invested in March.

The account set up for you as a member of the Scheme. Your contributions and contributions made by the Firm invested on your behalf, together with any investment return, which could be positive or negative, and after deduction of investment managment expenses.

means at any date the total of the annual rate of basic salary payable to you by Allen & Overy on that date. Salary usually excludes any incentive or award arrangements which a member is eligible to participate in, overtime payments, premium hours payment or other fluctuating emoluments. Your salary will be the lower of your actual rate of basic salary or the earnings cap, with the exception of the death in service lump sum, which will be based on the lower of your actual rate of basic salary or £200,000.

A members' widow, widower or civil partner at the date of his or her death provided that they were married to, or in civil partnership with the member before Pensionable Service ended. If a member is not survived by a Spouse the Trustee may, if Allen & Overy agrees, deem any person who in the Trustee's opinion was financially dependent upon the member to a substantial extent at the date of his or her death (or they were financially inter-dependent to a substantial extent) to be his or her spouse.