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12 Cards in this Set
- Front
- Back
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Marta pays into a pension scheme each month. The benefit that she will receive at retirement depends solely on the investment performance of the fund. Which scheme is this? |
Defined-contribution scheme, which could be either an occupational or personal pension. |
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Explain what is meant by the term ' lifetime allowance'? |
Lifetime allowance is the total amount that an individual hold in retirement benefits at the point where the benefits are crystallised without incuring a tax charge. |
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What rate of tax relief is applied to contributions to an individual's pension plan? |
Basic, higher or additional rate depending upon the contributors marginal rate of tax. |
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Contributions to additional voluntary contributions (AVCs) are deducted from gross income. true or false? |
True |
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Individuals must earn in excess of how much to be auto enrol into a workplace pension scheme? |
£10,000 per year |
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Stakeholder pensions must |
There must be an entry or exit charges. stakeholder pensions must meet government standards to make sure they offer value for money, flexibility and security. |
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John is using an uncrystallized funds lump sum to provide his pension benefits. The amount of each payment he takes that is free of tax is |
25% of each UFPLS (uncrystallized funds lump sum) |
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What previous form of income drawdown was converted to Flexi access road down from April 2015? |
Flexi drawdown arrangements were all converted to Flexi access drawdown (FAD) on 6th of April 2015 |
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Nicky is 60 years old and has a low appetite for risk. She's considering options for taking benefits from her pension fund and would like to able to receive a guaranteed income. With her pension fund. No longer export to investment risk. Which made the providing retirement benefit should Nicky take? |
An annuity provides a guaranteed income and there's no investment risk, so this would be a suitable option for Nikki. |
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In order to qualify for auto enrolment, an employee must: |
Be aged at least 22 |
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What is a defined-benefit pension scheme? |
An occupational pension scheme where the final benefits are defined, usually as a fraction of final salary or career average earnings for every year of membership in the scheme. EG a 1/60th scheme would provide a benefit of 1/60th final salary for every year of membership. The employer is responsible ensuring the promise benefits are provided, so carries all the risk. |
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What is a Defined-contribution pension scheme? |
A pension scheme by the individual has their own pension pot, either as part of an occupational scheme or a personal pension. Contributions from the individual and perhaps the employer invested, and at retirement individual pot is used to provide the benefits. The final benefits are not guaranteed, and so the risk lies with the individual. |
