RPSM09102440 - Technical Pages: Member benefits: An unsecured pension: Review of the unsecured pension limit: Sixty day window for the review

This guidance only covers members who became entitled to an unsecured pension before 6 April 2011. If the member reached age 75 between 22 June 2010 and 5 April 2011 you should also read the guidance in RPSM17100000 onwards.

If the member became entitled to their pension on or after 6 April 2011 then see the guidance at RPSM09103500.

Sixty-day window for the review of the unsecured pension limit

Where a formal five-yearly review of unsecured pension limits is being undertaken the scheme administrator does not necessarily have to make the calculation on the actual first day of the pension year concerned (the ‘reference date’). The calculation may be made on any day within a 60 day window ending on that first day of the pension year, i.e. within the sixty days running up to the reference date. This relaxation also applies where the scheme administrator has agreed to a member’s request for a new review to be carried out before the expiry of the five year reference period (see RPSM09102310).

The date the scheme administrator chooses to do the review in that 60 day window is referred to in the legislation as the nominated date.

The calculation will be carried out by reference to the value of the unsecured pension fund on the nominated date, and the member’s age on that date.

Use of the 60 day window does not change the timing of the forthcoming pension year. These periods are set from outset, and cannot be disrupted, although they may be shortened in the event of the member dying or where the member reaches age 75 see RPSM09102350). The new limit calculated still only comes into effect on the first day of the relevant pension year, even though it is effectively calculated in the earlier year.

Circumstances where the window cannot be used

For the avoidance of doubt, the 60 day window cannot be used where

• the initial calculation is made when the fund is first designated as available for unsecured pension, and
• an additional review is triggered because

• • of a lifetime annuity purchase or provision of a scheme pension,
  • additional fund designation occurs, or
  • of the application of a pension sharing order.

The choice of the scheme administrator

The 60 day window gives the scheme administrator time to ascertain the fund value and liaise with the member. It is therefore up to the scheme administrator to choose which day they do the calculation on.

RPSM09102450 gives an example of the operation of the 60 day window.