Pension pain

My client is employed by a national company earns approximately £200 000 per annum and is therefore potentially subject to the special annual allowance charge on lump sum pension contributions under FA 2009 Sch 35.

The client makes monthly contributions into the company stakeholder pension scheme the gross contribution being matched by the employer both of which are stated in the contract of employment to be 6% of annual salary.

Under ordinary circumstances no special annual allowance charge would occur as the monthly contributions would be protected.

Due to an administrative error by the client’s employer contributions paid to the scheme were less than should have been the case as contributions were calculated using the percentage on a capped figure and not the client’s actual salary.

Therefore a one-off catch-up contribution was made in May 2009 bringing overall contributions paid by both the...