This year’s Budget saw many changes to the public’s finances. One of those involved new rules when it comes to pensions.
The government will be bringing in greater flexibility for pensioners to be able to withdraw their full pension pot without paying the current 55 per cent tax, instead paying only their marginal rate of income tax. While this may be good news, the public sector saw slightly less encouraging changes for their pensions in the future.
Moving from a final salary pension scheme to a career average re-evaluated earnings (CARE) scheme, pensions will be assessed on average earnings rather than a person’s final salary. In cases such as this, there is the possibility that employees in the public sector will suffer a loss of pension, and in discovering the value of the loss, forensic accounting is a key tool.
For example, a teacher who has worked their way through the school system, taking on various positions before finally being made head teacher and reaping the financial benefits of their hard work could face a smaller pension pot due to their average salary not being as high as the head teacher wage – which would be the basis of a final salary pension.
Taking a look at adjusted figures and other various documents can help work towards calculating the true loss of pension and prepare evidence for a court deciding on the matter.
Frenkels Forensics are frequently instructed to prepare loss of pension calculations either as expert reports or by provision of calculations only (white labelling). The complicated nature of these reports also lends itself to joint instructions.
For expert help in in calculating loss of pension contact Frenkels Forensics for an independent appraisal.
By Vitek Frenkel – find me via Google+.