CPPIB Cash in Lieu Allowance Guide

Cash In Lieu Allowance Program

Overview

To help individuals genuinely impacted by the TAA, CPPIB offers the Cash In Lieu Allowance Program (CIL). It is also available to those with existing protections against the LTA.

An individual should carefully check to see if they are impacted by the TAA. It is important to remember that standard pension membership is most likely to be the best of the available options. Only if standard pension membership is negatively impacted by the TAA should an individual consider applying for the CIL. Rules are in place to prevent non-essential requests for participation.

How Does CIL Work and What Are The Rules of Participation?

Those with Existing Protection Against the LTA

• The key objective is to offer a CIL allowance to individuals who conclude that they need to stop pension funding altogether (as a result of previous LTA restrictions). The CIL allowance (pre deductions) will be equivalent to the rate of CPPIB ’s employer pension contribution entitlement. • If an individual has applied for Fixed Protection 2016 (or any of the previous versions - 2014, 2012 or Enhanced Protection), the individual can request the CIL allowance instead of standard pension membership. Where Fixed Protection is not in place, the option is not available. • The CIL allowance will be paid through payroll each month and is considered a cash payment. • The CIL allowance will be reduced by 13.8% to take into account the current level of corporate National Insurance Contributions (NIC) CPPIB must pay on this type of payment. It should be noted that corporate National Insurance does not normally apply to pension contributions whereas it will apply to CIL allowance payments since they are cash payments. Please note that if the rate of corporate NIC rate changes, this deduction will change accordingly. • The CIL allowance payment will be subject to personal NIC and income tax in the normal way (such as regular salary payments). • Examples of how the CIL allowance works in practice are shown on the following pages.

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