RPSM03106040 - Technical Pages: Protecting
pension rights from tax charges: Taking benefits before normal
minimum pension age: OPS right to benefits before age 50
Retirement benefits schemes: members with normal retirement
ages below age 50
Before 6 April 2006, some professional people, mainly sports
persons and individuals in hazardous occupations, had normal
retirement ages below 50. For these rights to be protected from tax
charges
- the member must have had the right on 5
April 2006 to take a pension and/or lump sum before the age of
50;
- the right must be unqualified in that no
other party need consent to the individual’s request before
it becomes binding upon the scheme or contract holder;
- the provision to take benefits before age
50 must have been set out in the governing documentation of the
retirement benefits scheme or deferred annuity
contract (section 32 policy) on 10 December 2003 (the date of the
second Inland Revenue "consultation document"); and
- the member must have
- had the right under the scheme or contract on 10
December 2003, or
- acquired the right in accordance with the
provisions as it was on 10 December 2003, upon joining the scheme
after that date.
The age at which the member has the right to take a pension on 5
April 2006 will be their protected pension age, and they will not
incur a tax charge when benefits are paid between that age and
normal minimum pension age.
A member with a protected pension age of less than 50 who
takes a pension before they reach the normal minimum pension age
may have their lifetime allowance reduced (see
RPSM03106080).
See
RPSM03106060 to
RPSM03106072 for other conditions
that apply to taking benefits before normal minimum pension
age.
