Any advice for non-UK students?

[didster]

I've just started studying for SA4 and am finding it a bit technical.
I'm not sure what to have expected but was under the impression that SA subjects should be more application and higher-level ideas.

I appreciate that the technical details would be necessary for a practicing (UK) actuary and would probably be all very familiar material for anyone with UK practical experience.

Anyone have any recommendations to get up to par on the UK practice? A crash course in UK pensions for non-UK students would be ideal.


I also have a question on the State Pension Credit (Chapter 2 page 9 of 2009 CMP).
Core reading says:

If a claimant's income is above the savings credit threshold, but less than their minimum income guarantee, the amount of the savings credit will be 60% of the difference between their qualifying income and the savings credit threshold.

If a claimant has total income greater than their minimum income guarantee, the amount of the savings credit will be reduced by 40% of the difference between their total income and their minimum income guarantee

I thought this was badly worded as it didn't specify how much the savings credit would start of at (before reduction) if your income was greater than the minimum income.

Based on the example, it is 60% of (savings credit threshold less minimum income guarantee)

Finally the question is : am I correct in thinking that the savings credit is always non-negative? That is, the 40% deduction applies only if you have any savings credit left and does not reduce your income from other sources.

 

[Elizabeth Horner]

Hi Didster

With regards to your question on the savings credit it might be helpful to look at the solution to Question 2.5 - this may shed a little light on things.

The following websites may also be useful:

www.direct.gov.uk
www.thepensionservice.gov.uk.

I think the internet would be a good place to start on getting up to speed on UK pension issues too if you're not based in the UK. Other websites that may be useful include:

www.ppf.gov.uk
www.thepensionregulator.gov.uk (there is a link on here to some useful online trustee training material that you might want to have a look at)
www.hmrc.gov.uk

There is a wealth of other stuff on the web that could be useful/interesting to you. The topical issues document on the forum has links to some good sites.

Alternatively maybe try doing a search on UK pensions as a start point - or many of the big UK pension consultany firms have links on their websites to useful information/newsletters etc.

I hope this helps - good luck with your study!

 

[didster]

Thanks Elizabeth for those links. I think I'll take some time to learn the specifics of UK pensions and hopefully I don't spend too much time studying anything that may be irrelevant.

Pension Credit
I did have a look at question 2.5 and I think I know how it works now. I was just wondering whether it was correct to assume that the savings credit is never negative.

Eg if your weekly income is say £1,000, then you simply get no savings credit as opposed to (60%*(124.05 - 91.20) - 40%*(1000-124.05)) , ie an effective tax.

Numbers in legislation
Just wondering how important it is to know all the various numbers scattered throughout the notes, eg UEL for 2008/9 is £40,040.

Also there are cases where it isn't clear to me which number is the one to know. For example in section 7.3 of chapter 4, the "multipler" for the PPF is stated as:

• 0.0000152 in the bold core reading
• 0.000165 is the Acted text

Which number is the one to know?
As an aside is the second one really 11 times the first or is there a typo?

I was under the impression that we are expected to know the facts as at May in the year before the exams regardless of whether it is subsequently updated. For example I planned to be familiar with all the GN's mentioned in the recommended reading despite a couple of them (can't remember which one offhand) no longer having effect after the end of this year.

Don't get me wrong, I'm prepared to do the work necessary to pass the exam. I would just prefer to not spend loads of time "barking up the wrong tree" which could be spent more productively elsewhere.

 

[Gresham Arnold]

Hi Didster

You are right, the Savings Credit does not become negative if your income is high ie it will not become a tax.

Numbers: Anything which is in the Core Reading is fair game to be tested in the SA4 exam - so the numbers could be examined. However, in previous exams the Examiners don't seem to have tested candidates' knowledge of the exact figures that apply in a particular year (although it would be relatively easy to design a question to do this).

It seems to me that the Practice Module exam gives an ideal opportunity to test knowledge of the figures. However, you imply that you are not based in the UK, so I guess you are unlikely to take this.

SA4 is quite different to the earlier exams and so I recommend that you have a look at a couple of past papers soon - hopefully that will give you a feel for the exam and will help you focus your preparation.

You are correct that exam should be based on the legislation that applied at the time the Core Reading was finalised (31 May) and in theory you do not need to know about subsequent changes. However, if you are aware of relevant changes, it is good to demonstrate this to the Examiners (as it shows that you are keeping up with current legislation).

In general, if in doubt about which number to learn, I recommend that you learn the one in the Core Reading - it seems to me that it would be hard to be criticised for reproducing that in the exam. You mention specifically the figure for the PPF multiplier. Unfortunately, there is a typo in our Course Notes and the figure in the actual Core Reading is 0.000152 (ie the figure of 0.0000152 (four zeros after the decimal point is incorrect and the Core Reading in the Course Notes should read 0.000152 (three zeros after the decimal point). I apologise for this error and will ensure it is listed in our Corrections Document.

I hope this helps. Good luck with your studies

 

[YetAnotherStudent]

I think the best thing for you to do would be to look through past papers and see how much 'exact' information has been required in the past. Generally it's not very much. I spent a lot of time cramming those bloomin' numbers into my head, and in hindsight I didn't need to do that. I think as the tutor has mentioned, that's generally tested in the practice modules now rather than in SA4.

I also think that it's unlikely, although not impossible, that the GNs that have been dropped will not be playing a major part in the exam. For the April exam they could appear, but I think the profession setting an exam based on the wrong legislation would be a bit pointless.

I'd recommend you don't get too worried about those earlier chapters in the notes with all the 'blah' in them and get into the later chapters.

That said, as you are writing the UK specific exam it would be necessary to know how the S2P and GMP and BSP and all that jazz fits together just incase a question comes up on contracting out and so on. Topical at the moment are the proposals to stop contracting out for money purchase schemes and introduce personal accounts, so make sure you are comfortable with those concepts if not the absolute nitty gritty.

good luck!