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[an error occurred while processing this directive] 3.4 Approval Conditions and Maximum Benefits To obtain approval, detailed requirements must be satisfied. Benefits provided must be within approvable limits, and pensions maxima include pension from all sources. The rules relating to these limits are complex resulting as they have from a series of legislative changes which in each case have become effective from a particular date without amending the rules concerning existing schemes. Because the 1987 and 1989 budgets introduced changes to approvable benefit levels, there are now effectively 3 different approval categories rather than a single, simple set of approvable benefits:- Group 1. covers all those who were members of an existing scheme with their current employer before 17 March 1987. Group 2. are those who are neither Group 1 nor Group 3. Group 3. are those who are members of a scheme established on or after 14th March 1989, or who joined a scheme established before that date where their joining date was on or after 1st June 1989. The earnings cap for 2004/05 is £102,000. The main differences are summarised in the following table: FEATURE GROUP 1 GROUP 2 GROUP 3   Pre '87 members. Joined a scheme before 17 March 1987. '87 - '89 members. Between 17 March 1987 and 31 May 1989 joined a scheme set up before 14 March 1989 Post '89 members. Joined a scheme set up on or after 14 March 1989 or joined an existing scheme on or after 1 June 1989. FINAL REMUNERATION No upper salary limit Limited to £100,000 (not indexed) for calculation of tax free cash only Limited to earnings cap for all benefits PENSION ENTITLEMENT 1/60th final remuneration for each year of service. Maximum 40 years service (retained benefits in addition). As Group 1 As Group 1 MAXIMUM PENSION No monetary limit (limited to 2/3rds final remuneration) As Group 1 2/3rds of earnings cap LATE ENTRANTS PENSION Uplifted Scale (accelerated accrual) Accelerated accrual simplified to 1/30th for each year of service, maximum 20 years service i.e. 2/3rd max pension after 20 years (to include retained benefits) As Group 2 Years   1-5 1/60th each year 6 8/60th 7 16/60th 8 24/60th 9 32/60th 10 + 40/60th (To include retained benefits) MEMBER'S CONTRIBUTIONS 15% remuneration As Group 1 As group 1, subject to earnings cap DEATH IN SERVICE LUMP SUM 4 x final remuneration, plus return of member's contribution and reasonable amount of interest. As Group 1 As group 1, subject to earnings cap WIDOW'S / DEPENDANT'S PENSION 2/3rd maximum member's pension 2/3rd maximum member's pension 2/3rds maximum member's pension MAXIMUM TAX-FREE CASH ENTITLEMENT 3/80th final remuneration for each year of service, maximum 40 years. As Group 1 As group 1, subject to earnings cap LATE ENTRANTS MAXIMUM TAX-FREE CASH Uplifted scale (accelerated accrual) As Group 1 schemes, but if pension benefit not payable at maximum rate, then lump sum maximum is scaled down but not below 3/80ths basisIf pension more than 1/60th but less than N/30th, tax free cash based on difference between 3/80th and uplifted scale in same proportion as pension difference between 1/60th and N/30th (Max final remuneration £100,000 for this purpose). Greater of 3/80th x final remuneration for each year of service, maximum 40 years or 2.25 X initial pension before commutation and allocation for escalation and dependants' pensions. Years   1-8 3/80th for each year 9 30/80th 10 36/80th 11 42/80th 12 48/80th 13 54/80th 14 63/80th 15 72/80th 16 81/80th 17 90/80th 18 99/80th 19 108/80th 20 + 120/80th (To include retained benefits)Can have uplifted tax-free cash without any pension EARLY LEAVERS Maximum benefits as per early retirement. As Group 1 Not left service, (opted out), as Group 1 schemes.Left Service. Maximum pension as per early retirement. EARLY RETIREMENT Males not before age 50. Females not before age 45 (if Normal Retirement Age (NRA) lower than 60 and within 10 years of it). Earlier for certain approved occupations and serious ill health. As Group 1 schemes Males and Females not before age 50. As Group 1 schemes. EARLY RETIREMENT MAXIMUM PENSION 1/60th each year of service (maximum 40) or, if greater N    x   P     where NS N = number of actual years service, max 40. NS = potential years service to Normal Retirement Date (NRD), may be limited to 40. P = maximum approvable pension had employee served to NRD. As Group 1 Schemes 1/30th for each year of service. Max 20 years i.e. 2/3rds max after 20 years. Final remuneration subject to earnings cap.Advance funding for maximum early retirement not permitted EARLY RETIREMENT TAX FREE CASH 3/80ths for each year of service (maximum 40) or, if greater N    x   LS NS whereLS = maximum approvable lump sum had employee served to NRD. As Group 1, but Final Remuneration subject to maximum £100,000 for this purpose Greater of 3/80th final remuneration for each year of service maximum 40 years or, 2.25 x initial pension. LATE RETIREMENT Benefits may be increased to the maximum approvable on the basis that the actual date of retirement is the NRD. If total service exceeds 40 years, each year in excess of 40 falling after NRD may earn a further 60th of final remuneration up to an overall maximum of 45/60th. Alternatively, the maximum approvable pension at NRD may be increased by the RPI or actuarially to the date of retirement. Controlling Directors - years of service are increased until actual date of retirement (up to age 70). If tax free cash sum taken at NRD but pension deferred the pension maximum can be increased in line with RPI or actuarial factors reflecting age and investment yield, but not in line with members earnings. Only RPI linkage is allowed up to age 70 for controlling directors. As Group 1 schemes Benefits may be increased to N/30ths of actual service (subject to maximum 2/3rds) or by reference to final remuneration at actual retirement. Benefits can only be taken at the time of leaving service, except that they must be taken at age 75. Provided the occupational scheme Trustees do not step outside the regulatory and legislative guidelines, there is quite wide leeway to structure the scheme rules as the company wishes. Retirement Through Ill Health If an individual is unable to follow normal employment through accident or illness, then retirement may occur at any age, with the maximum approvable pension being related to the fraction of final remuneration that would have applied had the individual stayed in service until normal retirement age. The same principle applies to the tax free lump sum. In exceptional circumstances and where life expectancy is so short as to make it unreasonable for any of the benefit to be taken in pension form, it may be possible for the entire early retirement pension to be commuted for a cash sum. The element of the payment representing pension which otherwise would not have been payable in cash is subject to tax at the rate of 20%

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