RPSM03303020 - Scheme Administrator Pages: Protecting pension rights from tax charges: Benefit payments - enhanced protection: Information from the member

Information needed before benefits crystallise

[Regs 11 & 3 The Registered Pension Schemes (Provision of Information) Regulation 2006 - SI 2006/567]

If an individual wants to take advantage of enhanced protection they must give the scheme administrator the reference number of their certificate of enhanced protection. This is required by regulation 11 of the Registered Pension Schemes (Provision of Information) Regulation 2006.

A scheme administrator could also ask a member for a copy of their certificate. Alternatively if the member has completed form APSS 203 authorising HMRC to give the scheme administrator details of the certificate, the scheme administrator can view the certificate online. If a scheme administrator would prefer to receive details of the certificate in the post form APSS 209 must be completed in addition to form APSS 203.

If the individual does not give the scheme administrator details of their certificate the administrator should assume that the individual does not have enhanced protection. This means the lifetime allowance charge will apply in the usual way.

A scheme administrator will also need to know whether or not the individual has previously had a benefit crystallisation event from any registered pension scheme and if so how much crystallised at that event.

If benefits are being paid from a cash balance or defined benefits arrangement this information will be needed to establish whether or not the crystallisation of benefits will cause relevant benefit accrual to occur. If relevant benefit accrual occurs on the crystallisation of benefits, enhanced protection will be lost and crystallising benefits will not be protected from the lifetime allowance charge.

Another reason why the scheme administrator needs this information is to ensure they meet their reporting requirements under regulation 3 of the Registered Pension Schemes (Provision of Information) Regulation 2006. This is the requirement to submit an Event Report - see RPSM03303070.