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 enable 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 from 2000/2001.
HM Treasury has issued the Preston factors, comprising earnings and interest factors, for employers. This guidance aims to assist in providing retrospective access to occupational pension schemes for eligible part-time workers.
The factors are designed to allow those entitled to reinstatement to acquire pension service at an actuarially fair cost. The intention is to ensure these individuals are neither better nor worse off than if they had contributed to the scheme during their original employment.
This provision follows rulings made by the European Court of Justice and the House of Lords in 2000 and 2001, which favoured part-timers gaining retrospective access to occupational pension schemes, provided they meet the necessary legal requirements.
Why this matters: The Preston factors facilitate the fair calculation of pension service for eligible part-time workers, ensuring they can gain retrospective access to occupational pension schemes.