RPSM15200090 - Member Pages: Special annual allowance: Overview: What are pension inputs?

This guidance only applies for the 2009-10 and 2010-11 tax years.

What are pension inputs?

Whether or not you are liable to the special annual allowance charge depends on what pension inputs you have made. But what are pension inputs?

Pension inputs are the contributions paid to a registered pension scheme and the increase in the value of your pension rights over a period of time. How your pension input is valued depends on the type of arrangements that you have. If you are unsure what type of pension arrangements you have ask your scheme administrator.

The special annual allowance rules use the same method of valuing pension inputs as is used for the annual allowance. However the pension input period for the special annual allowance is fixed to the tax year. Unlike the annual allowance you cannot change the pension input period.

Money purchase arrangements that are not cash balance arrangements

These arrangements are also known as other money purchase arrangements. Examples of this type of arrangements are personal pension schemes, including group personal pensions, most retirement annuity contracts and small self-administered schemes.

Broadly your pension input amount is the total of

• any relievable pension contributions paid by you or by someone else (apart from your employer) on your behalf, and
• any employer contributions paid in respect of you.

Full details on how pension inputs are valued for this type of arrangement can be found at RPSM06102000.

Cash balance arrangements

Broadly your pension input amount is the increase in the value of your benefit promise over the tax year. Full details on how pension inputs are valued for this type of arrangement can be found at RPSM06101000.

Defined benefits arrangements

Broadly your pension input amount is the increase in the value of your benefit promise over the tax year. Full details on how pension inputs are valued for this type of arrangement can be found at RPSM06103000.

Hybrid arrangements

Your pension input amount will be the greatest of the possible pension input amounts calculated on the possible benefit alternative offered by your scheme. Full details on how pension inputs are valued for this type of arrangement can be found at RPSM06104000.