Using Events to Schedule One-Off or Ongoing Transfers into Money Purchase Pensions.
Aside from regular contributions made from earnings, events can also be used to schedule one-off or ongoing transfers into Money Purchase Pension Plans
Transfers between accounts can be scheduled in two ways, within the actual pension itself if it is an existing pension via: Dashboard>Pensions>Transfers>Add Transfer
Option 1;
>Add Transfer
Transfers before paying Expenses: Transfers are made before expenses.
Click on Timing.
Drag and drop your Event/s from the Timeline into the Transfer Timing box, this will tell the software when you would like the transfer to go ahead.
If you are unable to drag and drop the Event or if you have not created an Event for this specific transfer/contribution yet; if you double click on one of the grey bars in your chart you will be able to create an Event and you can set this as your Start Event.
Click Done.
Option 2;
OR if inputting a new pension where the transfer option will not appear you can add the transfer by clicking the + button from your Dashboard and select Transfers
Inputting a new pension;
Transfers before paying Expenses: Transfers are made before expenses.
Click on Timing
Drag and drop your Event/s from the Timeline into the Transfer Timing box, this will tell the software when you would like the transfer to go ahead.
If you are unable to drag and drop the Event or if you have not created an Event for this specific transfer/contribution yet; if you double click on one of the grey bars in your chart you will be able to create an Event and you can set this as your Start Event.
Click Done.
You can check to make sure the software is doing what you expected by going onto Year View>Pensions, scrolling across to the year in question and checking that a contribution has been made into the pension.
Ongoing Transfers
If you are scheduling ongoing transfers into a money purchase, two events are required: one to schedule beginning of the transfers (this could be the Start, if transfers are to begin at the start of the plan) and another to schedule the end of these transfers.
Same principle as above;
>Add Transfer
Note - Ongoing transfers; Recurring - Yes
Click Timing
Drag and drop your Event/s from the Timeline into the Transfer Timing box, this will tell the software when you would like the transfers to go ahead.
If you are unable to drag and drop the Event or if you have not created an Event for this specific transfer/contribution yet; if you double click on one of the grey bars in your chart you will be able to create an Event and you can set this as your Start Event/End Event.
Click Done.
Note: The Transfers functionality is only used to schedule transfers into money purchases.
Transfers of funds out of money purchases – to take tax free cash, begin drawdown or to purchase an annuity – are scheduled separately on the individual pension screen under Crystallisation/Planned Withdrawal and Annuitisation menu options.
Note that pension contributions are limited to either salary or the current £60,000 annual maximum, whichever is the lower of the two figures. Regular earnings define one’s pensionable salary. Bonuses and dividends are not pensionable income. Without supporting earnings – which are entered on the Income section of the Dashboard – pension contributions are limited to £3,600 per annum.
Here are further details on how the software treats the annual allowance pension contribution
Our understanding is that tax relief on pension contributions is only available up to the higher of £3,600 or 100% of their ‘relevant UK earnings’ for that tax year, regardless of the carry forward available.
For example if a person earns £80,000 in a tax year, they can only contribute up to £80,000 to their pension that tax year. No matter how much unused allowance they have remaining from the previous three years, they can only bring forward £20,000 so that their pension contributions equal their annual salary.
The software has therefore been coded to not allow personal contributions in excess of the client's earned income in that year. So, if you were to model a client with income of £80,000, carry forward of £40,000 and a personal pension contribution of £100,000, the software would only carry forward £20,000 and restrict the contribution to the £80,000 which receives tax relief.
With regards to the purpose of carry forward in the software, it is there to enable you to model your clients making pension contributions above the annual contribution allowance up to the amount of their earned income and receiving tax relief on those contributions e.g. you can use carry forward to model a contribution of £100,000 with tax relief on the full amount if their income is £100,000 or more.
Here is a further link to how Transfers are used in the software.