RPSM11102020 - Technical Pages: Lifetime allowance: When you test for the lifetime allowance: The eleven benefit crystallisation events
[s216][Sch 32] [The Registered Pension Schemes (Authorised Payments) Regulations 2009 SI 2009 No 1171]
The legislation distinguishes between different benefit payments through different BCEs because each needs to be valued in a different way in order to obtain an appropriate measure of its capital value.
The eleven BCEs arise from the following circumstances
| BCE 1 | Where funds are designated to provide a member with a drawdown (before 6 April 2011 an unsecured) pension (see RPSM11104050). Until 6 April 2011, this BCE also arose where the member reached age 75 still holding uncrystallised funds in a money purchase arrangement - here those uncrystallised funds were deemed to have been designated to provide an unsecured pension (see RPSM11104090). |
| BCE 2 | Where a member becomes entitled to a scheme pension, whether from a defined benefits arrangement or a money purchase arrangement (see RPSM11104200). |
| BCE 3 | Where a scheme pension already in payment to a member is increased beyond a permitted margin (see RPSM11104300). |
| BCE 4 | Where a member becomes entitled to a lifetime annuity under a money purchase arrangement (see RPSM11104500). |
| BCE 5 | Where a member reaches their 75th birthday under a defined benefit arrangement without having drawn all or part of their entitlement to a scheme pension and/or lump sum (see RPSM11104600). |
| BCE 5A | Where a member reaches age 75 with an earlier designated drawdown pension fund which has not been secured by a lifetime annuity or scheme pension (see RPSM11104640). |
| BCE 5B | Where (on or after 6 April 2011) a member reaches 75 under a money purchase arrangement in which there are remaining unused funds (see RPSM11104645). |
| BCE 6 | Where the member becomes entitled to a relevant lump sum. Not all the authorised lump sum payments are caught here (see RPSM11104700). |
| BCE 7 | Where a relevant lump sum death benefit is paid on the death of the member (see RPSM11104800). Again, not all the authorised lump sum payments that may be paid on the death of the member are caught by this BCE. And where benefits are paid on the death of the member in the form of a dependant’s pension a lifetime allowance test is not triggered (see RPSM10100080). |
| BCE 8 | Where a member’s benefits or rights are transferred to a qualifying recognised overseas pension scheme (see RPSM11104850). |
| BCE 9 | Where certain payments are made to or in respect of a member that constitutes an event that is prescribed in regulations (see RPSM11103800) |
The issue of when entitlement arises in the context of the eleven BCEs is discussed in RPSM11102040 to RPSM11102055.
| Glossary (RPSM20000000) |
