RPSM09103110 - Technical Pages: Member benefits: An alternatively secured pension: Limit in year member dies
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.
Alternatively secured pension limit in the year of death
| [Para 12(2), Sch 28] |
Where the member dies the current pension year will be deemed to end immediately before that event, unless a guarantee is being provided (see the next page). For limit purposes the shortened pension year will be treated as if it had continued for a full 12 months. So if the maximum alternatively secured pension has already been paid before the member dies there is no concern.
Once the member dies no further alternatively secured pension may be paid, other than as a dependants’ alternatively secured pension or through any term-certain guarantee attached to that pension entitlement. What happens at this point is detailed on RPSM09103170.
Example
Patrick is drawing an alternatively secured pension. The pension is not guaranteed. The maximum alternatively secured pension for pension year running from 4 November 2008 to 3 November 2009 is £4,000.
Patrick dies on 6 December 2008, so the current pension year ends on close of play 5 December 2008. This is the last such year.
Whilst the shortened pension year runs only from 4 November 2008 to 5 December 2008, the £4,000 maximum applies to that period in the same way it would have done if it had continued for 12 months. So if Patrick had already drawn £4,000 of income withdrawals in that month then there would be no repercussions.
The remaining alternatively secured pension fund will be used to provide death benefits.
| Glossary (RPSM20000000) |
