RPSM03307035 - Scheme Administrator Pages: Protecting pension rights from tax charges: Benefit payments - other forms of protection: Pension age - transfers

What happens to a member’s protected pension age if they transfer benefits out of the scheme?

Unless a transfer is a block transfer a transfer of benefits from a scheme where the individual has a protected pension age to another scheme will trigger loss of protection. For the avoidance of doubt this rule applies to both uncrystallised and crystallised rights.

To be a block transfer a transfer must involve the transfer in a single transaction of all the sums and assets representing the member’s accrued rights under the scheme and at least one other member of that pension scheme. Also before the transfer, the member must not have already been a member of the registered pension scheme receiving the transfer for longer than 12 months before the date of the transfer. If the receiving scheme was approved as a personal pension scheme and the individual was a member on 5 April 2006 any period of prior membership is ignored where the member’s rights before the transfer were solely contracted out rights. To be a single transaction

• all of the sums and assets must be transferred from the transferring scheme to only one receiving scheme. Two or more partial transfers to two or more different schemes cannot be a transfer in a single transaction; and
• the transaction must be made under a single agreement for a single transfer between the two schemes.

It is not necessary that all of the sums and assets are all physically passed from the transferring scheme to the receiving scheme on the same day - there may be legal or administration reasons why this is not possible. However they should all be transferred in relation to the agreement to transfer and within a reasonable timescale."

RPSM03106070 and RPSM03106072 give more details on when a transfer will be a block transfer.

When a block transfer is made the member can retain their right to a protected pension age. The conditions set out in RPSM03307032 to RPSM03307034 will continue to apply.