Pension Tax Credit (Hansard, 21 January 2003)

§ Dr. Cable
To ask the Secretary of State for Work and Pensions how many and what proportion of pensioners in the Twickenham constituency will benefit from the introduction of the pension tax credit in October; and if he will make a statement. [91669]

§ Mr. McCartney
I refer the hon. Member to the written answer I gave him on 9 January 2003,Official Report, column 333W.

§ Paul Flynn
To ask the Secretary of State for Work and Pensions if he will publish in theOfficial Report the notes accompanying the combined pension forecast on page 45 of the pensions Green Paper (Cm. 5677). [89647]

§ Mr. McCartney
The explanatory notes that accompany the example of a combined pension forecast are as follows:
Flexiplan-Explanatory Notes
Plan Pay Plan pay is your total pay-including any overtime and bonus.
Your investment over the year You choose how much to invest from 2 per cent to 15 per cent of plan pay in 1 per cent steps. Emap matches your investment for up to 5 per cent of plan pay (7 per cent for members with 10 or more years' service).
Balance at 6 October 2002 The balance shown is not guaranteed and may fluctuate up or down. The balance excludes funds fron earlier periods of flexiplan membership.
Protected Rights If you joined flexi plan before 1 January 1997, part of your flexiplan account (called 'protected rights') replaces some of the state earnings-Related Pension and must be taken as a pension which cannot start to be paid before age 60. The protected rights balance is shown separately as well as being included in the total balance on your statement.
Illustration Assumptions The pension illustration overleaf is based on certain assumptions, which are that Contributions to Flexiplan continue at the current rate; the pension bought is guaranteed for five years, has an attaching 50 per cent partner's pension and increases in line with price inflation up to 5 per cent a year (up to 3 per cent a year on any protected rights): the average annual rate of inflation over the period to retirement is 3 per cent, investment returns over the same period will exceed your salary increases by2.5 per cent a year, and the cost of the pension at retirement is calculatedassuming future investments yields 3 per cent ahead of inflation; and for members who are a long way from retirement, the cost of the pension iscalculated using the assumptions described above and for members who areclose to retirement, the cost is in line with current market prices.
Future Events The assumptions used relate to the future. As this is uncertain, your actual Flexiplan benefits could differ significantly from this illustration. For example, you may leave Emap before reaching retirement, in which case your contributions would stop, oryou may simply alter the level of contributions to Flexiplan. The financial assumptions about the future (see note five) all have "a significant effect on the level of the pension illustration. The investment return achieved by your account before retirement is very important, particularly for younger 259W members. For example an average return of just 1 per cent per annum ahead or behind the illustration assumption could increase or decrease the resulting pension percentage by as muchas a quarter. It is important for older members nearing retirement, where volatility of returns becomes an important issue. This is when your account is switched graduallyinto special "retirement units" to provide more certainty of pension level.
Lump Sum Death Benefit The person to whom the lump sum death benefit is payable is at discretion of the Trustees so that inheritance tax does not have to be paid. It is therefore important that you complete a nomination form to let the trustees know to whom you would like the benefit to be paid. If you have not completed a form or would like to make a change, please contact the Benefits helpdesk.
Inland Revenue Maximum Benefits Flexiplan is approved by the Inland Revenue which means that all contributions and investment income are free to tax. This also means that the benefits provided underFlexiplan and contributions paid into your account are subject to Inland Revenue limits. Where practicable these limits have been taken into account in preparing thisstatement. However, if you have benefits retained in a pension arrangement of aprevious employer, it may be necessary to restrict the amount quoted.
Updates Regular updates of the projections are important, so an illustration of your Flexiplan benefits will be prepared for you at least once a year, even if you leave Emap. If you would like any further details please contact the Benefits Helpdesk.
Data Protection Empa plc and the trustees hold this and other information about you in order that your benefits can be administered correctly. this information is also used to identify you when you make enquiries. This information is disclosed to the Trustee's advisers and administrators as necessary. Emap plc and the Trustees are required to keep information about you as up-to-date as possible. If the information about you given in this statement is incorrect or incomplete, please contact the Benefits Helpdesk on 01733 311399. You may also contact the Benefits Helpdesk if you would like more information about this or a copy of the information held about you (there is a fee payable for this service).
Every effort has been made to ensure that accuracy of this statement. Nevertheless, it is not binding on the Trustees if an error or omission is subsequently discovered.