RPSM09103040 - Technical Pages:
Member benefits: An alternatively secured pension: Alternatively
secured pension year
Alternatively secured pension year
| [Para 12(1) and 13, Sch 28] |
The initial limit calculated under an
arrangement at the member’s 75th birthday
(or a later date, if entitlement arises after that date) applies
only for the 12 month period starting from that date. This and
subsequent 12 month periods are referred to in the legislation as
alternatively secured pension years but are again referred to in
this Manual simply as
pension years.
Once set, the 12 month pension year structure will not
change. These pension years will continue until the member dies,
with that last pension year ending when the member dies, unless a
guarantee is being paid (see
RPSM09103120).
Where all the
alternatively secured pension fund is used to
purchase a
lifetimeannuity or provide a
scheme pension then income withdrawal payments
will stop.
RPSM09103100 explains what happens
if further alternatively secured pension fund is created under the
arrangement at a later date.
Where the member drew an
unsecured pension benefit before they reached age
75 the last unsecured pension year will be cut short on their
birthday. The limit for this last unsecured pension year is not
reduced simply because it is shortened.
Example
Alan is drawing an unsecured pension. His unsecured
pension years run from 1 April to 31 March the following year.
Alan is 75 on 9 May 2007. On 8 May 2007 Alan receives his
last unsecured pension payment. His last unsecured pension year
runs from 1 April to 8 May 2007. The limit for that pension year is
not altered.
Alan has opted to draw his pension from age 75 as an
alternatively securedpension. On 9 May 2007 the remaining
unsecured pension fund becomes the alternatively
secured pension fund, and the
scheme administrator calculates the maximum
alternatively secured pension payable. This limit applies for the
period 9 May 2007 to 8 May 2008 (the first alternatively secured
pension year).
The next pension year will run from 9 May 2008 to 8 May
2009, and so on.
