RPSM09101030 - Technical Pages: Member benefits: A secured pension: Overview: Commencement of a secured pension

Commencement of a secured pension (and the age 75 issue)

Where pension entitlement arose before 6 April 2011, although if the member reached age 75 between 22 June 2010 and 5 April 2011 you should also read the guidance in RPSM17100000, there was a requirement for a secured pension to be provided by age 75 at the latest. This requirement has been removed but what is set out below explains the position up to 6 April 2011.

Once a member has reached their 75^th birthday the only pension a registered pension scheme can provide to that member is a secured pension (or, if a money purchase arrangement, an alternatively secured pension).

A secured pension may, however, come into payment or be secured at a much earlier date; any time after the normal minimum pension age or earlier if the member is taking ill-health benefits.

In some registered pension schemes the commencement or switch to a secured pension will be triggered automatically at a specific time. In other schemes the member will be given some option over when the secured pension starts, i.e. they can decide when a lifetime annuity or scheme pension is secured.

However, there is nothing specific in the legislation requiring that a pension must actually be paid at age 75, and what actually happens at this point will depend on the scheme provisions. All the legislation does is limit the form benefits can take after age 75 (both in terms of payments to the member and the provision of benefits on the death of the member) and ensure that any undrawn entitlements are tested for lifetime allowance purposes at that date.

The lifetime allowance position is covered in more detail at RPSM11100000 onwards.