VOCATIONAL QUALIFICATIONS DEATHS PART 2 DEATH BENEFITS WITH SPECIAL CIRCUMSTANCES THURSDAY 9 MAY 2013 TIME ALLOWED: 9.30 PM 12.30 PM 3 HOURS 1. Answer ALL the questions. 2. Write all your answers in the answer book provided. 3. Begin each question on a new page. 4. Show all workings clearly. 5. Calculate the benefits using only the information given. 6. Where the benefits are likely to exceed the remaining Individual Lifetime Allowance, state in your answer book that you would refer the case to your manager. 7. Factors must be rounded in accordance with the instruction in the Table of Factors. Round all other figures to two decimal places (or whatever is the normal practice where you work).
Questions Section A Calculate the death benefits / options for: 1. AMY MARCH (XYZ) 2. JOHN WILSON (OPQ) 3. RHODA PENMARK (RST) 4. JENNET HUMFRYE (RST) 5. BANA TCHANILE (XYZ) Section B 6. Write a letter explaining the benefits payable and the options available in respect of AMY MARCH. 7. Write a letter explaining the benefits payable and the options available in respect of RHODA PENMARK. The letter may be addressed either to the beneficiary or to the Trustees (whichever is the normal practice in the organisation for which you work). Please note: Candidates must not sign letters with their own names. Letters should be signed A N Other.
CASE STUDY DETAILS XYZ SCHEME DEATHS PART 2 QUESTION 1 Event history Date of first event 02/05/2013 First event DEATH Date of second event Second event Member details Surname MARCH Forename AMY Date of birth 15/08/1946 Gender FEMALE Spouse s date of birth 12/01/1942 Dependent child s date of birth Date of joining company 02/04/1991 Date of joining scheme 02/05/1991 Category of membership A Basic pay and lower earnings limit history for the scheme year commencing 6 April 2005 2006 2007 2008 2009 2010 2011 2012 2013 Salary 29,600 31,200 34,550 35,000 34,500 36,220 37,950 39,000 41,102 L.E.L 4,264 4,368 4,524 4,680 4,940 5,044 5,304 5,564 5,668 Contribution history Total member s normal contributions 30,848.94 Total member s AVCs Current value of AVCs (single life) payable immediately (joint life) payable immediately
Contracting-out details at date of first event Pre 06/04/1988 GMP (per annum) Post 05/04/1988 GMP (per annum) 1,258.92 Contribution equivalent premium Certified amount Special circumstances / additional information Total earnings in 12 months prior to date of first event 39,175.24 On 1 January 2002 the Company, with the consent of the Trustees, agreed that Amy March s pension on retirement or earlier death would be enhanced by 5 years and 28 days of pensionable service. The enhancement is subject to the rules of the XYZ Pension and Life Assurance Scheme (Category A) and should be treated as post 5 April 1997 pensionable service. Amy March s current available lifetime allowance is 92.10%. THIS QUESTION ALSO REQUIRES A LETTER (QUESTION 6) DEATHS 2 QUESTION 1
CASE STUDY DETAILS OPQ SCHEME DEATHS PART 2 QUESTION 2 Event history Date of first event 29/04/2013 First event DEATH Date of second event Second event Member details Surname WILSON Forename JOHN Date of birth 09/09/1951 Gender MALE Spouse's date of birth 04/07/1972 Dependent child's date of birth Date of joining company 19/12/2000 Date of joining scheme 19/12/2000 Target retirement date 09/09/2016 Annual salary history for the scheme year commencing 6 April 2005 2006 2007 2008 2009 2010 2011 2012 2013 82,950 81,200 72,563 74,900 85,921 84,556 88,760 89,215 91,500 Contribution history Total member's normal contributions 74,412.59 Total employer s normal contributions 119,060.15 Total member's AVCs
Personal Retirement Account details Member s Current Unit Holdings Fund Member s normal contributions Employer s normal contributions Member s AVCs Unit Holdings Unit Holdings Unit Holdings Global Equity Fund 0.0000 0.0000 0.0000 Index Linked Bond Fund 0.0000 0.0000 0.0000 Balanced Fund 0.0000 0.0000 0.0000 Corporate Bond Fund 0.0000 0.0000 0.0000 Cash Fund 0.0000 0.0000 0.0000 Lifestyle Fund 30,112.3952 48,179.8275 0.0000 Investment Fund Unit Prices Fund Current Unit Price ( ) Global Equity Fund 3.828 Index Linked Bond Fund 6.691 Balanced Fund 4.149 Corporate Bond Fund 2.513 Cash Fund 3.959 Special circumstances / additional information On 12 May 2004 John Wilson transferred in the value of his Defined Contribution benefits from his previous scheme, which amounted to 8,226.91. This transfer is wholly in respect of employer contributions. These benefits are excluded from John Wilson s Personal Retirement Account detailed above. The Current Unit Holding in respect of this transfer is 3,036.2945 units. These units are held entirely in the Lifestyle Fund. John Wilson s current available lifetime allowance is 39.37%. DEATHS 2 QUESTION 2
CASE STUDY DETAILS RST SCHEME DEATHS PART 2 QUESTION 3 Event history Date of first event 06/05/2013 First event DEATH Date of second event Second event Member details Surname PENMARK Forename RHODA Date of birth 04/11/1954 Gender FEMALE Spouse s date of birth 02/01/1968 Dependent child s date of birth Date of joining company 01/02/1996 Date of joining scheme 06/04/1996 Earnings history for the scheme year ending 5 April 2005 2006 2007 2008 2009 2010 2011 2012 2013 16,920 21,500 22,000 23,000 24,550 25,625 26,952 27,928 31,260 Contribution history Total member s normal contributions 18,198.13 Total member s AVCs Current value of AVCs (single life) payable immediately (joint life) payable immediately
Pre 6 April 2006 pension accrued as at 5 April 2013 CARE pension (per annum) 4,440.90 Post 5 April 2006 pension accrued as at 5 April 2013 CARE pension (per annum) 1,544.35 Special circumstances / additional information Contractual salary at date of first event 34,250.00 Pro-rata CPI from 6 April 2013 to date of first event is 0.27%. The Company, with the consent of the Trustees, agreed to enhance the rate of pension accrual for Rhoda Penmark s CARE pension to 53rds for pensionable service from 6 April 2013. Rhoda Penmark s current available lifetime allowance is 100.00%. THIS QUESTION ALSO REQUIRES A LETTER (QUESTION 7) DEATHS 2 QUESTION 3
CASE STUDY DETAILS RST SCHEME DEATHS PART 2 QUESTION 4 Event history Date of first event 12/01/2010 First event RETIREMENT Date of second event 02/05/2013 Second event DEATH Member details Surname HUMFRYE Forename JENNET Date of birth 12/01/1950 Gender FEMALE Spouse s date of birth 07/05/1948 Dependent child s date of birth Date of joining company 01/01/1992 Date of joining scheme 06/04/1992 Earnings history for the scheme year ending 5 April 2005 2006 2007 2008 2009 2010 2011 2012 2013 Contribution history Total member s normal contributions Total member s AVCs Current value of AVCs (single life) payable immediately (joint life) payable immediately
Pre 6 April 2006 pension accrued as at 5 April 2013 CARE pension (per annum) Post 5 April 2006 pension accrued as at 5 April 2013 CARE pension (per annum) Special circumstances / additional information Pension in payment at date of second event is 8,582.88 per annum, which is split as follows: Pre 6 April 2006 pension (per annum) 8,582.88 Post 5 April 2006 pension (per annum) 0.00 Lower of 5.0% / RPI increases from date of first event to date of second event is 10.6%. Lower of 2.5% / RPI increases from date of first event to date of second event is 7.4%. On retirement Jennet Humfrye commuted 3,760.08 per annum of pension in return for a taxfree lump sum of 56,401.13, split as follows: Pre 6 April 2006 pension (per annum) 1,165.80 Post 5 April 2006 pension (per annum) 2,594.28 On retirement the Company, with the consent of the Trustees, agreed that any spouse s pension on death after retirement would be 66% of the member s pension (to include any pension exchanged for a tax-free lump sum on retirement). Jennet Humfrye s current available lifetime allowance is 100.00%. DEATHS 2 QUESTION 4
CASE STUDY DETAILS XYZ SCHEME DEATHS PART 2 QUESTION 5 Event history Date of first event 16/04/2001 First event PRESERVED LEAVER Date of second event 01/05/2013 Second event DEATH Member details Surname TCHANILE Forename BANA Date of birth 08/05/1951 Gender MALE Spouse's date of birth 19/06/1956 Dependent child's date of birth Date of joining company 06/11/1997 Date of joining scheme 06/11/1997 Category of membership B Basic pay and lower earnings limit history for the scheme year commencing 6 April 2005 2006 2007 2008 2009 2010 2011 2012 2013 Salary L.E.L Contribution history Total member's normal contributions 11,336.64 Total member's AVCs 3,926.12 Current value of AVCs 7,922.28 (single life) payable immediately (joint life) payable immediately
Contracting-out details at date of first event Pre 06/04/1988 GMP (per annum) Post 05/04/1988 GMP (per annum) Contribution equivalent premium Certified amount Special circumstances / additional information Preserved pension (per annum) at date of first event 2,809.18 Lower of 5% / RPI increases from date of first event to date of second event is 43.7%. Bana Tchanile s current available lifetime allowance is 100.00%. DEATHS 2 QUESTION 5