Your Annual Allowance details for 2010/11 are now available
The assessment of your IBM pension benefits against the Annual Allowance (AA) for the period 6th April 2010 to 5th April 2011 is now available on request from IBM Pensions.
The AA is the maximum amount of pension savings an individual can make on a tax-free basis in any one year or Pension Input Period (PIP). The nominated PIP for the IBM Pension Plan and the IT Solutions Pension Scheme runs from 6 April to 5 April the following year. The first PIP ended on 5 April 2007.
The AA for 2010/11 was £255,000. The amount that should be compared to the AA is the sum of:
• M Plan Smart* contributions and/or any employee M Plan contributions
• IBM credits
• Additional Smart* Contributions (ASCs) and/or any Additional Voluntary Contributions (AVCs)
• The value of the increase in any accrued Defined Benefit (DB) pension throughout the PIP, multiplied by ten.
When assessing whether you have exceeded the AA you must also take into consideration any pension contributions that you have made to any other pension arrangement.
Any excess of the AA will be subject to Income Tax at your highest marginal rate and you will need to include this information on your Income Tax return.
If you need details of the amount of the AA that you have used for your tax return please contact the Pensions Department at pensions@uk.ibm.com.
Changes to the AA from April 2011 onwards
Information regarding changes that came effective in April 2011 in the way in which your pension benefits are assessed against the AA, the value of the AA itself, and how any unused allowance from previous PIPs can be used to increase the amount of tax-free pension savings, can be found here.
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Last Updated: 14/10/2011
