VOCATIONAL QUALIFICATIONS DEATHS PART 2 DEATH BENEFITS WITH SPECIAL CIRCUMSTANCES WEDNESDAY 6 SEPTEMBER 2017 TIME ALLOWED: 9.30 AM 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. LANA ZAHAWI (XYZ) 2. GOLDIE ZACKSMITH (RST) 3. RHYS MOGG (RST) 4. LILLIAN PETERSEN (OPQ) 5. DOYLE PRICE (XYZ) Section B 6. Write a letter explaining the benefits payable and the options available in respect of LILLIAN PETERSEN. 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 04/09/2017 First event DEATH Date of second event Second event Member details Surname ZAHAWI Forenames LANA Date of birth 22/01/1950 Gender FEMALE Spouse s date of birth 15/06/1942 Dependent child s date of birth Date of joining company 15/02/1985 Date of joining scheme 15/03/1985 Category of membership A Pensionable salary history for the scheme year commencing 6 April 2009 2010 2011 2012 2013 2014 2015 2016 2017 54,010 54,192 56,200 58,992 64,350 64,010 59,250 60,000 61,556 Contribution history Total member s normal contributions 71,161.60 Total member s AVCs Current value of AVCs Single life AVC pension (per annum) payable immediately Joint life AVC pension (per annum) payable immediately
Contracting-out details at date of first event Pre 06/04/1988 GMP (per annum) 791.96 Post 05/04/1988 GMP (per annum) 1,671.80 Contribution equivalent premium Certified amount Special circumstances / additional information Salary at date of first event 61,500.00 Lana Zahawi paid the default contribution rate (70ths accrual) from the date she joined the XYZ Pension and Life Assurance Scheme until 5 April 2011, inclusive. From 6 April 2011, Lana Zahawi varied her contribution rate to build up the following rates of pension accrual: 6 April 2011 to 5 April 2014, inclusive = 60ths 6 April 2014 onwards = 70ths Lana Zahawi s current available Lifetime Allowance is 100.00%. DEATHS 2 QUESTION 1
CASE STUDY DETAILS RST SCHEME DEATHS PART 2 QUESTION 2 Event history Date of first event 05/02/2015 First event RETIREMENT Date of second event 01/09/2017 Second event DEATH Member details Surname ZACKSMITH Forenames GOLDIE Date of birth 05/02/1950 Gender FEMALE Spouse s date of birth 12/10/1968 Dependent child s date of birth Date of joining company 15/07/1992 Date of joining scheme 06/04/1993 Earnings history for the scheme year ending 5 April 2009 2010 2011 2012 2013 2014 2015 2016 2017 Contribution history Total member's normal contributions 51,466.46 Total member s AVCs Current value of AVCs Single life AVC pension (per annum) payable immediately Joint life AVC pension (per annum) payable immediately
Pre 6 April 2006 pension accrued as at 5 April 2017 CARE pension (per annum) Post 5 April 2006 pension accrued as at 5 April 2017 CARE pension (per annum) Special circumstances / additional information Pension in payment at date of second event is 8,735.04 per annum, which is split as follows: Pre 6 April 2006 pension (per annum) 6,199.08 Post 5 April 2006 pension (per annum) 2,535.96 Lower of 5.0% / RPI increases from date of first event to date of second event is 3.2%. Lower of 2.5% / RPI increases from date of first event to date of second event is 3.2%. On retirement, Goldie Zacksmith commuted 4,675.82 per annum of pension in return for a taxfree cash sum of 64,526.30. The commuted pension was split as follows: Pre 6 April 2006 pension (per annum) Post 5 April 2006 pension (per annum) 4,675.82 At the date of first event, the Company, with the consent of the Trustees, agreed that the spouse s pension percentage on death after retirement would be augmented to 66.00%. Goldie Zacksmith s current available Lifetime Allowance is 81.67%. DEATHS 2 QUESTION 2
CASE STUDY DETAILS RST SCHEME DEATHS PART 2 QUESTION 3 Event history Date of first event 23/08/2017 First event DEATH Date of second event Second event Member details Surname MOGG Forenames RHYS Date of birth 11/01/1962 Gender MALE Spouse s date of birth 12/09/1950 Dependent child s date of birth Date of joining company 22/06/1995 Date of joining scheme 06/04/1996 Earnings history for the scheme year ending 5 April 2009 2010 2011 2012 2013 2014 2015 2016 2017 27,000 28,600 29,750 31,000 30,500 32,992 30,500 31,000 31,950 Contribution history Total member s normal contributions 24,524.25 Total member s AVCs Current value of AVCs Single life AVC pension (per annum) payable immediately Joint life AVC pension (per annum) payable immediately
Pre 6 April 2006 pension accrued as at 5 April 2017 CARE pension (per annum) 2,038.77 Post 5 April 2006 pension accrued as at 5 April 2017 CARE pension (per annum) 3,804.66 Special circumstances / additional information Contractual Salary at date of first event (actual) 14,550.00 Contractual Salary at date of first event (full time equivalent) 29,100.00 Pro-rata CPI from 6 April 2017 to date of first event is 1.03%. Rhys Mogg worked full time (5 days a week) from the date he joined the Company until 5 June 1998, inclusive. From 6 June 1998, Rhys Mogg varied his working week as follows: 6 June 1998 to 5 April 2012, inclusive = 2.0 days a week 6 April 2012 onwards = 2.5 days a week Rhys Mogg s current available Lifetime Allowance is 100.00%. DEATHS 2 QUESTION 3
CASE STUDY DETAILS OPQ PLAN DEATHS PART 2 QUESTION 4 Event history Date of first event 02/09/2017 First event DEATH Date of second event Second event Member details Surname PETERSEN Forenames LILLIAN Date of birth 16/08/1950 Gender FEMALE Spouse's date of birth 15/06/1952 Dependent child's date of birth Date of joining company 12/01/1992 Date of joining plan 12/01/1992 Target retirement date 31/12/2020 Annual salary history for the plan year commencing 6 April 2009 2010 2011 2012 2013 2014 2015 2016 2017 81,900 84,554 86,775 82,650 85,111 87,500 90,992 91,350 92,855 Contribution history Total member's normal contributions 97,324.35 Total employer s normal contributions 155,718.96 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 Global Equity Fund Index Linked Bond Fund Balanced Fund Corporate Bond Fund Cash Fund Lifestyle Fund 66,526.4649 106,442.3438 Unit Holdings Investment Fund Unit Prices Fund Current Unit Price ( ) Global Equity Fund 5.314 Index Linked Bond Fund 1.359 Balanced Fund 4.465 Corporate Bond Fund 1.549 Cash Fund 1.155 Special circumstances / additional information On 16 August 2015 the Company, with the consent of the Trustees, agreed for a one-off augmentation payment of 9,250.00 to be paid to Lillian Petersen s Personal Retirement Account. The augmentation, which is not included in the Unit Holdings detailed above, purchased an additional 8,708.3556 units in the Corporate Bond Fund. Lillian Petersen s current available Lifetime Allowance is 100.00%. THIS QUESTION ALSO REQUIRES A LETTER (QUESTION 6) DEATHS 2 QUESTION 4
CASE STUDY DETAILS XYZ SCHEME DEATHS PART 2 QUESTION 5 Event history Date of first event 15/08/2010 First event PRESERVED LEAVER Date of second event 21/08/2017 Second event DEATH Member details Surname PRICE Forenames DOYLE Date of birth 28/02/1959 Gender MALE Spouse's date of birth 08/01/1970 Dependent child's date of birth Date of joining company 06/11/1997 Date of joining scheme 06/11/1997 Category of membership B Pensionable salary history for the scheme year commencing 6 April 2009 2010 2011 2012 2013 2014 2015 2016 2017 Contribution history Total member's normal contributions Total member's AVCs 27,566.23 Current value of AVCs 49,612.89 Single life AVC pension (per annum) payable immediately Joint life AVC pension (per annum) 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 19,751.29 Lower of 5.0% / RPI increases from date of first event to date of second event is 21.0%. Doyle Price s current available Lifetime Allowance is 58.72%. DEATHS 2 QUESTION 5