Article 2
SCHEDULE 1CALCULATION OF TRANSFER AMOUNTS
Definitions
1. In this Schedule—
“C” means the Cut-Off Date (31 March 2012);
“E” means the Effective Date (31 March 2012);
“F” means the Final Transfer Date;
“Interim Calculation Date 1” or “I1” means 30 September 2011;
“Interim Calculation Date 2” or “I2” means 31 January 2012;
“Interim Calculation Date 3” or “I3” means 31 March 2011;
“Market Value Adjustment 1” or “MVA1” has the meaning given in paragraphs 5 and 6;
“Market Value Adjustment 2” or “MVA2” has the meaning given in paragraphs 5 and 7;
“RMPP Cut-Off Date Rules” has the meaning given in Schedule 1 of the Benefits Order(1);
“RMPP Ax” means the audited value of the assets of the RMPP (determined in accordance with paragraphs 3 and 4) as at a particular date X (being a date before the Interim Transfer is made);
“RMPP A′x” means the estimated value of the assets of the RMPP (determined in accordance with paragraphs 3 and 4) as at a particular date X (being a date before the Interim Transfer is made);
“RMPP LSAM” means the liabilities of the RMPP (determined in accordance with paragraph (2)) where—
“S” represents the date up to and including which members’ service is measured for the calculation;
“A” represents the date as at which the financial assumptions are to be determined for the purpose of the calculation;
“M” represents the date of the membership (but not service) and salary data to be used in the liability calculation;
“RMPP FLXY” means the funding level of the RMPP, which is calculated as—
(where Y, X, and X have the role of S, A and M respectively by reference to the definition of RMPP LSAM);
“RMPP FL′XYZA” means the estimated funding level of the RMPP, which is calculated as—
(where Y, Z and A have the role of S, A and M respectively by reference to the definition of RMPP LSAM);
Basis for calculating the liabilities of the RMPP
2. The liabilities of the RMPP must be determined—
(a)using the standard actuarial method known as the projected accrued benefit method;
(b)on the basis of the financial assumptions in Schedule 2;
(c)on the basis of the demographic assumptions in Schedule 3;
(d)by reference to the applicable trust deed and rules governing the RMPP and membership as provided for in paragraph 11;
(e)without reference to any liabilities in respect of money purchase benefits; and
(f)including provision for members’ contractual added years purchased by the payment of additional voluntary contributions.
Basis for calculating the value of the RMPP assets
3. The assets of the RMPP must be valued applying the methodology in Schedule 4.
4. For the purposes of that valuation—
(a)the value of the assets includes net current assets and liabilities, but excludes—
(i)any assets and liabilities relating to money purchase benefits, and
(ii)any contributions paid to the RMPP in advance of the Effective Date but in respect of amounts falling due after this date under the schedule of contributions for the RMPP (as defined in section 227(2) of the Pensions Act 2004(2)), and
(b)the obligations of the Trustee to make the Transfers must be disregarded.
Adjustments for market value at time of transfer
5. Paragraphs 6 and 7 set out the adjustment (the “Market Value Adjustment” or “MVA”) which must be made when calculating the Interim Transfer Amount and the Estimated Final Transfer Amount in respect of the period between the Interim Calculation Date 2 and the Effective Date.
6. The “Market Value Adjustment 1” or “MVA1” must be determined by the Government Actuary, based on the returns achieved between those dates on a weighted portfolio of index-linked Gilts of similar duration to the liabilities of the RMPP, by reference to the Amended RMPP Rules.
7. The “Market Value Adjustment 2” or “MVA2” is defined as the greater of—
(a)MVA1, and
(b)100%.
Calculation of Interim Transfer Amount
8. The Interim Transfer Amount is dependent on the Estimated RMPP Funding Level as at the Effective Date (RMPP FL′ECI2I3) and must be determined as follows—
If RMPP FL′ECI2I3 ≤100% then—
Interim Transfer Amount = [RMPP A′E] – [1.25 x RMPP LCI2I1 x MVA2]
If RMPP FL′ECI2I3 > 100% then—
Interim Transfer Amount = [RMPP A′E] – [1.25 x RMPP LCI2I1 x MVA2 x RMPP FL′E C I2 I3] where RMPP LCI2I1 is calculated by reference to the Amended RMPP Rules.
Calculation of Estimated Final Transfer Amount
9. The Estimated Final Transfer Amount is dependent on the Estimated RMPP Funding Level as at the Effective Date (RMPP FL′ECI2I3) and must be determined as follows—
If (RMPP FL′ECI2I3) ≤100% then—
Estimated Final Transfer Amount = [RMPP A′E – RMPP LCI2I1 x MVA1 – Interim Transfer Amount]
If RMPP FL′ECI2I3 > 100% then—
Estimated Final Transfer Amount = [(RMPP A′E) – (RMPP LCI2I1 x MVA1 x RMPP FL′ECI2I3) – Interim Transfer Amount]
Calculation of Final Transfer Amount
10. The Final Transfer Amount is dependent on the RMPP Funding Level as at the Effective Date (RMPP FLEC) and must be determined as follows—
If (RMPP FLEC) ≤100% then—
Final Transfer Amount = [RMPP AE – RMPP LCEE – Interim Transfer Amount]
If RMPP FLEC > 100% then—
Final Transfer Amount = [(RMPP AE) – (RMPP LCEE x RMPP FLEC) – Interim Transfer Amount]
For the purpose of this paragraph the Interim Transfer Amount must be determined as the audited value of assets that were transferred in the Interim Transfer (as at the Effective Date).
Applicable trust deed and rules governing the RMPP and members when calculating the liabilities of the RMPP
11. In the above calculations, liabilities of the RMPP must be determined by reference to the trust deed and rules governing the RMPP and membership as follows—
(a)RMPP FL′ECI2I3 will be calculated by reference to the RMPP Cut-Off Date Rules. The calculation will be based on liabilities in respect of all members of the RMPP at the end of Interim Calculation Date 3; and
(b)RMPP FLEC will be calculated by reference to the RMPP Cut-Off Date Rules. The calculation will be based on liabilities in respect of all members of the RMPP at the end of the Cut-Off Date; and
(c)RMPP LCI2I1 will be calculated by reference to the Amended RMPP Rules. The calculation will be based only on liabilities in respect of members of the RMPP who are active members at the end of Interim Calculation Date 1; and
(d)RMPP LCEE will be calculated by reference to the Amended RMPP Rules. The calculation will be based only on liabilities in respect of members of the RMPP who are active members at the end of the Effective Date.