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Hi, I appreciate I'm late to the party on this one but would appreciate some advice. HCBM has kicked out my daughter (14), who now lives with me, and has alienated me from my son (16) through lies and other parental alienation tactics. She chooses to work minimal hours to be able to claim benefits and pay me next to nothing in maintenance for our daughter whilst I now pay 2/3 of what I used to for the two children, just for my son. I don't begrudge him the money but she has already "mysteriously" had 3 foreign holidays this year. My dilemma now is that I am going to receive a windfall due to my employer being bought and I don't want her to get the significant increase (c£250pcm) to spend on herself. I've been led to believe that payments into occupational pensions are taken into account by the CMA when calculating payments due so would paying a lump sum into my occupational pension offset the increase in my gross salary? Any tips gratefully received. Thanks
The CMS should use two tables to determine if the pension contribution are excessive. The first is a table from the defunct FSA. It determines the amount you can contribute depending on the age you started your pension contributions. For example, if you started your pension at 40, you can contribute between 18-25% of your gross income. The other table is a gross replacement rate table. This fancy term means the percentage of your current salary you should have after retirement. For example, if your salary is between 25,000 and 49,999 pounds a year, your contributions till retirement and current pots should provide a pension of at least 60% of your salary. For example, if you earn 40,000, you are entitled contributions that allow you to get a 20,000 a year pension. The document they should use it the following (note that the do whatever they want and you have to take them to court if they don't follow their own rules).
@edpacket this is interesting information, before i try to pick it all apart, i'm wondering how it applies in my circumstance, in that i started contributing to a pension some 25 years ago, but awful wage and tiny contribution, but for say the last 8 years i've massively ramped it up and my pension is 90% from the last 8 years, so does that mean on the table i'd be wrong to assume the 16-22% is "reasonable" and also it says contribution but i don't see if it says if that means just yours or the combination of both you and your employer, as that makes quite a difference to me.
thanks for sharing!
My impression is that the table was never intended for the purpose it is being used by the CMS. It was created by the defunct FSA to highlight that the later you started contributing, the more you have to contribute (pretty humble purpose and nothing more than that). As you are finding, it doesn't take into account if you have contributed 10 pounds for 30 years or if you started contributing and stop, etc. It doesn't make sense but the CMS people use it as a bible (they take anyone from the street to be a case worker so they need an script as they don't know anything about laws, pensions, math, etc.). if you started contributing at 30 yo, they allow you to contribute between 12-18% that is it. No if not buts. In that case, you have to push them to consider the second table. This makes more sense as it asks what percentage of your salary are you going to retire with and allows you to contribute accordingly to reach that target. The pension we are talking about includes yours and your employer.
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