Pensions

missmac1991

Hi, I'm just wondering if someone can give me a hand with something pension related. I am studying for my Pensions QFA, and am at the section where it discusses revenue maximum limits. My question is:

When you find the maximum revenue pension amount (usually 2/3 final remuneration) is this to be taken as the maximum pension you can purchase with the proceeds of the plan? Or is it a way for you to find out the total value of the fund you can build up while remaining within Revenue limits?

Thanks for your time!

Alan152

Yes two thirds is the max pension you can be in receipt of....if that figure is ten grand a year for example divide that figure by a current annuity rate for example five percent and that will give you an estimated fund value...answer two hundred k value to buy ten k pension of that was the current rate

..
Take In to account your tax free cash too though

Alan152

Revenue limits can be maxed out too though remember that although it is not hugely common

missmac1991

get the pension equivalent of the lump sum and take that from the maximum allowable pension. Where I am getting really confused is the fact that revenue require you to purchase an annuity of 119, 800 unless you are in receipt of a garenteed pension of 18000 per annum before you take your occupational pension, which, in the majority of cases, will go way beyond the maximum pension limit. It seems to completely contradict itself

Alan152

They are figures for an arf that your using which is different...and since the last budget tho
se figures have changed back to the old levels 63500 and 12700....

Arf is like a bank account where you draw out money as opposed to an annuity which is an actual income