Pay in Lieu of Pension Policy (PLP)
Durham University recognises that some staff may be impacted by changes in taxation relating to their pension. The Pay in Lieu of Pension Policy (PLP) may be of benefit and applies to both our pensions schemes, USS and DUPS.
Pension benefits earned by individuals in the UK, which qualify to receive tax relief, are restricted to maximum allowances permitted by HM Revenue & Customs (HMRC).
The value of your pension benefits across all schemes in which you are accruing benefits is limited for taxation purposes in two ways:
1 The Lifetime Allowance (LTA) – this is a threshold for the tax favourable benefits you can receive on retirement (from all schemes). The limit from 6 April 2020 is £1,073,100.00
2 The Annual Allowance (AA) – this measures the increase in the value of your benefits over a 12 month period called the pension input period (PIP). The AA is currently £40,000 a year.
If you exceed the AA, it is your responsibility to tell HMRC about the increase in the value of your benefits using a self-assessment tax return.
Members must take independent financial advice before being able to access this scheme to ensure they consider carefully the right option for them. The policy and application forms can be found below. Please contact the Pensions team for the appropriate opt out form.