Legislation update

The LSA is currently £268,275 and is not expected to change. The way that your tax-free cash is calculated by the Fund has not changed but if your maximum tax-free cash entitlement is higher than the LSA (or the amount of LSA you have left to use) we will automatically restrict it.

Lump Sum and Death Benefit Allowance
At the same time, the Lump Sum and Death Benefit Allowance (LSDBA) also came into play. The LSDBA is a lifetime cap of £1,073,100 on the amount of tax-free cash that can be paid either to, or in respect of you. The key difference is that this also includes any lump sum benefits that are payable after your death.

Our factsheet gives more detail and some examples of how both of these allowances work in practice.

Equalisation update

Pension schemes used to have different normal retirement ages for men and women.

This mirrored the way that the State Pension used to work, with an earlier retirement age for women. In 1990, the European Court of Justice ruled that equal pay rules for men and women should also apply to pension schemes. They didn’t require schemes to make retrospective adjustments but ruled that from 17 May 1990, equalisation of retirement ages was required.

The period between this date and the date that schemes changed their rules to equalise retirement ages is known as ‘the Barber window’ (Barber being the surname of the person who brought the complaint to the courts). The Fund, along with many other schemes, took steps to deal with this issue but further court rulings have continued to crop up.

Working with its advisers, the Trustee has now agreed a methodology to finally resolve this matter, and the administration team is reviewing all affected member records. If you’re affected, we’ll be in touch over the coming months.

In addition, most members of the Fund who joined before April 1997 will have a Guaranteed Minimum Pension (GMP) as part of their entitlement. This was a result of being ‘contracted-out’ of part of the State Pension system. Like the State Pension, GMPs were also not equalised.

After many years of uncertainty, the High Court ruled that GMPs needed to be equalised as well. This is a very complicated area, so we’re working with our advisers to resolve this problem, alongside ‘Barber’ equalisation.

In summary, there’s no need for you to take any action as we’ll be in contact if you’re affected. And any impact on your pension is likely to be very small.