What is counted as Final Salary when my pension entitlements are being computed?

[S class]

Can Payment in Lieu of Notice (PILON) be included under this category when calculating the average of previous 3 years salary?

I assume it shouldn't be used to add onto the final salary if using only the final 12 month period?

I don't know. Just make sure that the PILON is included in the figures forwarded to the pension provider. They presumably know which calculation will give the highest final salary.

 

[Lisboa]

Thanks. I've been offered redundancy, and although I'm not sure of the exact formula used by the (DC) pension provider, by using formulas I've seen elsewhere, it seems my employer may have included PILON onto my final salary redundancy figures when forwarding to the pension provider. This has resulted in my current value tax-free amount being recorded higher than it should be.

If when I turn 50 I can withdraw tax-free 25% of whatever the value of the pension is on that particular future date anyway, then I assume it's in my best interest for this amount to actually be recorded as low as possible now in order to reduce my redundancy taxable amount through the SCSB calculations.