ContšŸ‘‡
26/ If you have paid AA tax between 1995-22 it is likely your charges will be lower in 1995 than in 2015 scheme. This is because the AA rules are particularly unfair to members of 2 schemes. If your AA charges go down during any of the remedy period, you can claim a refund

27/ It does not matter if you paid cash for AA or used scheme pays, if you overpaid these charges can be refunded. If you charges go up (unlikely unless you have ā€œMHOā€ status) you may have to pay back tax. There is usually a statutory limit of 4 years for paying underpaid tax.
28/ This limit of 4 yrs of underpaid tax was referenced in the consultation document šŸ‘‡, although the position is less clear in the full consultation response. We will need to see the final regulations to understand the implications.
29/ The consultation document also stated that members who choose reformed 2015 in retirement & incurred AA charges would be ā€œcompensatedā€. Again detail in is less clear in the full consultation response. We will need to see the final regulations to understand the implications.
30/An important area are ā€œcontingent decisionsā€. Many members took decisions i.e. ā€œopting outā€ of the scheme based on the age discrimination. @theBMA argued certain cases should automatically be compensated vs having to prove this on a ā€œcase by caseā€ basis
31/ Government disagreed, and now cases will need to be made on a case by case basis, putting a huge burden on members and also the scheme to resolve this, with no guarantee of success. This is very disappointing and will likely form the basis of ongoing legal action
32/ Another area which was very disappointing is regarding the need for advice. Govmnt acknowledges that members affected by AA (i.e many doctors) will be particularly affected - and therefore need advice as a result of the discrimination.
33/ You will recall I mentioned the ā€œcost capā€ mechanism. Previously the scheme had identified a ā€œfloor breachā€ ie the ā€˜15 scheme was no longer ā€œgenerous enoughā€ (due in part to disgraceful pay rises). This should have triggered a rise in benefits i.e. 1/48ths instead of 1/54ths
34/ Instead government ā€œfrozeā€ agreed cost-cap due to McCloud & is now saying costs from the (government’s illegal age discrimination) should be ā€œmemberā€ costs in the cost-cap likely removing the ā€œfloor breachā€. In other words, they want YOU to pay for THEIR mistake. Disgraceful.
34/ As I said, the decision over legacy (95/08) vs reformed (15) will *not* be simple. Many factors important
ā—when you want to retire
ā—need for lump sum
ā—need for dependent benefits
ā—how long your est. to live
ā—AA/LTA tax between choices

*DONT ASSUME LEGACY IS ALWAYS BEST*
35/ We @TheBMA are actively looking if we can build tools - like the @theBMA Goldstone modeller, to help you work out your tax position in both schemes šŸ‘‡, and help you make the decision. Many people will still need advice. We’ll keep you posted.
36/ You've probably gathered, this is not straightforward! Some things have gone our way (like ā€œDCUā€) - others will be an ongoing fight. There’s never been a better time to be part of a union. @theBMA have got your back šŸ’Ŗ
37/37

If you want to know more about pensions/"McCloud" , join me & @BMA_Pensions colleagues at one of our webinars. We've already had over 5000 people register, sign up early to avoid dissapointment.

Its free and open to all.
https://t.co/HhqdZ88c4m

Pls RT!

[END thread 2/2]

More from Finance

Ok here is the explanation. Grab a cup of coffee and read on. If you have not read/noticed this, you will see intraday options movement in a new light.


Say we have two options, one 50 delta ATM options and another 30 delta OTM option. Normally for a 100 point move, the ATM option will move 50 points and the OTM option will move 30 points. But in a high volatile environment, the OTM option will also move nearly 50 points

To understand why this happens, first understand why an ATM option is 50 delta. An ATM option has the probability of 50% of expiring as ITM. The price just has to close a rupee above the strike for the CE to be ITM and vice versa for PEs

Now think of a highly volatile day like today. If someone is asked where the BNF will close for the day or expiry, no one can answer. BNF can close freakin anywhere, That makes every option of an equal probability of being ITM. So all options have a 50% probability of being ITM

Hence, when a huge volatile move starts, all OTM options behave like ATM options. This phenomenon was first observed in the Black Monday crash of 1987 at Wall Street, which also gave rise to the volatility skew/smirk

You May Also Like