PTM164500 - Information and administration: requirement for insurance companies to give the member a relevant benefit crystallisation event statement
As of 6 April 2024 there is no longer lifetime allowance. If you are looking for information about protections, enhancement factors and the lifetime allowance charge please see these pages on The National Archives. If you are looking for information about the principles of lifetime allowance and benefit crystallisation events please see these pages of The National Archives.
Glossary PTM000001
Regulations 16, 17 & 17A The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567
An insurance company must provide the member with a statement if it is paying either a scheme pension or a lifetime annuity using funds derived from a registered pension scheme. The insurance company should have been given the information they need by the scheme administrator or where they are taking over responsibility from another insurance company from the old insurer - see PTM109000.
The statement will show the amount of the member's lump sum and lump sum and death benefit allowance used up by various relevant benefit crystallisation events (rBCEs). The content of the rBCE statement will vary depending on the nature of the funds used to provide the annuity or scheme pension.
PTM164400 provides guidance on how to calculate the amount of allowances used up. Note that there are special rules for members with fixed protection, fixed protection 2014 , fixed protection 2016, individual protection 2014 and individual protection 2016. The amount expressed on the statement should go to two decimal places. This should be a rounded down figure.
There is no prescribed form for giving the annual rBCE statement to the member. One option for providing the annual rBCE statement to members is to include the figure on form P60 substitute - see PTM164400.
Scheme pension or lifetime annuity not provided from drawdown funds
Part of a drawdown fund used to provide the scheme pension or lifetime annuity
Whole drawdown fund used to provide the scheme pension or lifetime annuity
Scheme pension or lifetime annuity not provided from drawdown funds
The insurance company must give the member a statement each year showing the amount of the members and lump sum allowance, and lump sum and death benefit allowance used up by:
- the scheme pension or lifetime annuity, plus
- any relevant lump sum paid in connection with the pension or annuity.
Part of a drawdown fund used to provide the scheme pension or lifetime annuity
The insurance company must give the member a statement each year showing the amount of lump sum allowance and lump sum and death benefit allowance used up by the member becoming entitled to the scheme pension or lifetime annuity. If the amount of the rBCE is nil the insurance company doesn’t need to provide a rBCE statement.
Whole drawdown fund used to provide the scheme pension or lifetime annuity
The insurance company must give the member a statement each year showing the total amount of the lump sum allowance and lump sum and death benefit allowance used up by:
The total of all the following:
- Relevant benefit crystallisation events in respect of the member under the scheme that originally provided the funds to the extent that sums and assets representing those benefits have not been transferred to another registered pension scheme
- where that scheme has received a transfer of crystallised rights the relevant benefit crystallisation events that occurred in respect of those transferred-in rights