Lump Sum Allowance Functionality Setup
Function called Lsa: percent_lump_sum_allowance used to calculate member’s remaining LSA.
Payment pre 2006 – boolean – does member have pension in payment pre 6 April 2006
Pension paid pre 2006 – real number – what is the pension in payment as at 6 April 2006
Is there a bce - boolean – does member have a bce event prior to 6 April 2024
Updated total LSA and LSDBA – real number – Input any protected LSA limit the member may have
LSA and LSDBA used by member – real number – Input any LSA or LSDBA the member may have used to date
DOR – date – effective date of event
Maximum Cash Calculation
If a scheme wants to restrict the maximum cash to the LSA ensure the maximum cash calculation includes the parameter below is set to true - this will apply for quotation and event items if both are to be restricted.
The second parameter here is linked to a data item where a user can input if a member has a Protected LTA which should be used in the calculation - this is defaulted to zero so in most cases the standard LSA will be what the PCLS is tested against but if an amount is entered the standard LSA will be overridden by the protected amount multiplied by 25%.
What the calculation routine does
Calculation routine only outputs a result if DOR is on or after 6 April 2024 (derived from DOR parameter value).
Please refer to the separate solutions article within the Administration BAU Processes for the inputs and administrator is required to complete and how this feeds into the calculation.
PCLS – pension commencement lump sum amount treated as tax free. Tag as PCLS Member Payment Type. Note to remove any items previously tagged as a PCLS.
This should be equal to the amount of cash the member has chosen, subject to the remaining LSA as determined above.
PCELS – pension commencement lump sum amount subject to marginal tax rate. Tag as PCELS Member Payment Type. Note this will be processed as a payroll payment where event date is on or after 6 April 2024.
This should be equal to the amount of cash the member has chosen, in excess of the remaining LSA as determined above.