A
dependants’ short-term annuity contract may
be purchased subject to certain provisions as described in
RPSM10104490. The
scheme administrator must consider the level of
dependants’ unsecured pension already provided for that
dependant under the relevant arrangement in the
pension year, whether paid direct as income
withdrawal or through other dependants’ short-term contracts
previously purchased from that fund. The scheme administrator also
needs to consider any income which will be provided under those
existing dependants’ short term annuity contracts later in
the pension year. The scheme administrator also has to consider the
position for future pension years
Where the value of the dependants’ unsecured pension
that will accrue in future under a dependants’ short-term
annuity contract is not clear the scheme administrator may, for
example, decide to hold back payments until nearer the end of the
pension year when the position is clear, then pay a
‘top-up’ income withdrawal payment towards the end of
that pension year.
RPSM09102130 deals with the taxation
position where the limit is exceeded in a pension year.
| Glossary ( RPSM20000000) |
