RPSM09103070 - Technical Pages: Member benefits: An alternatively secured pension: 60 day window for limits review
This guidance only covers members who became entitled to an alternatively secured 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 reached age 75 on or after 6 April 2011 then see the guidance at RPSM09103500.
Sixty day window for review of the alternatively secured pension limit
| [Para 13(2) and (3), Sch 28] |
Where the scheme administrator is recalculating the maximum for each successive pension year they may actually do the calculation ‘as at’ any day in a 60 day window ending on that first day of the pension year. This window is not available where the initial calculation takes place at the beginning of the first alternatively secured pension year. This mirrors the position with the provision of a member’s unsecured pension.
Where the scheme administrator makes use of the 60 day window the day of calculation chosen is referred to in the legislation as the ‘nominated date’. The calculation will be carried out by reference to the value of the alternatively secured pension fund on that date.
Use of the 60 day window does not change the timing of future pension years. These periods are set from outset, and cannot be disturbed in any way (although they may be cut short in certain circumstances - see RPSM09103090 and RPSM09103100). The new limit still only applies on the first day of the relevant pension year, even though it is effectively calculated in the earlier year.
It is up to the scheme administrator to choose which day they do the calculation on. Scheme members will only have the choice where the scheme administrator gives them that choice.
Example
Alan is drawing income withdrawals as an alternatively secured pension.
The second recalculation of the maximum permitted payment is due on 9 May 2009 (the start of his second alternatively secured pension year). The administrator may make the calculation on any day between the 10 March 2009 and 9 May 2009.
The scheme administrator chooses to make the calculation with effect from 20 March 2009. So 20 March 2009 is the nominated date and the calculation will be based on the size of the alternatively secured pension fund on that date. It will not be based on Alan’s age at that date but be based on the assumption that he is still aged 75.
The maximum level of pension calculated on 20 March 2009 will apply for the pension year running from 9 May 2009.
| Glossary (RPSM20000000) |
