HM Treasury Publishes Preston Factors for Employers
UKPulse Money Desk
HM Treasury has released the Preston factors, which include earnings and interest factors, for employers. These factors are used to help part-time workers gain retrospective access to occupational pension schemes.
- HM Treasury has published Preston factors (earnings and interest factors) for employers.
- These factors are used to allow individuals entitled to reinstatement to gain pension service at an actuarially fair cost.
- The provision of these factors follows European Court of Justice and House of Lords’ rulings in 2000/2001 regarding part-timers' retrospective access to occupational pension schemes.
HM Treasury has published the Preston factors, which encompass earnings and interest factors, for employers. These factors are designed to assist individuals who are entitled to reinstatement in gaining pension service at an actuarially fair cost.
The provision of these factors follows rulings made by the European Court of Justice and the House of Lords in 2000 and 2001. These rulings favoured part-time workers gaining retrospective access to occupational pension schemes, provided they meet the necessary legal requirements.
The aim of using these factors is to ensure that individuals are, as far as possible, neither better nor worse off than if they had contributed to the scheme during their original employment.
Why this matters: The Preston factors are crucial for employers to calculate the actuarially fair cost for part-time workers to gain retrospective access to occupational pension schemes, ensuring compliance with past legal rulings.