RPSM09202050 - Member pages: Member benefits: Pension benefits from a defined contribution or cash balance arrangement: Income withdrawal

This guidance only covers pension entitlements that arose 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 pension entitlement arose on or after 6 April 2011 see RPSM09103500.

Income withdrawal

Income withdrawal is where the scheme administrator will pay you an unsecured pension direct from the arrangement.

The maximum amount of unsecured pension that can be paid is found by using GAD tables. The resulting pension figure is called the basis amount and you will be entitled to be paid up to 120% of that figure per annum.

Whilst you are receiving this payment, all of the funds held in the arrangement continue to be held (and invested) within the registered pension scheme as the unsecured pension fund, with the pension paid out of these funds to you in accordance with your general wishes subject to some basic limits.

Unlike a short-term annuity contract, income withdrawal may continue under an arrangement beyond your 75th birthday, but only as an alternatively secured pension (and therefore within more stringent rules).