RPSM11104940 - Technical Pages: Lifetime allowance: Valuing benefits on BCEs: Pension in payment on 6 April 2006: An unsecured pension, an alternatively secured pension, or a drawdown pension (from 6 April 2011)

Where the pre-commencement pension is being paid as an unsecured pension, alternatively secured pension or (from 6 April 2011) a drawdown pension

Where the pre-commencement pension is being paid at the point of that first BCE as an unsecured or (from 6 April 2011) as a drawdown pension when the member has not reached age 75

Where the pre-commencement pension is being paid from a scheme at the point of that first BCE as an unsecured pension or a drawdown pension the annual level of the pension in payment is taken as the maximum permitted annual unsecured or drawdown pension payable for that pension year. This will be the amount as determined at the most recent valuation/review of the member’s fund.

How future unsecured and drawdown pension payments would fit into the post 5 April 2006 regime is dealt with on RPSM09102110. Where the pre-commencement pension is being valued within the transitional period referred to in this page, the maximum is taken as that in force on 5 April 2006 (as detailed in the above page).

Where the pre-commencement pension is being paid at the point of that first BCE as an alternatively secured pension or (from 6 April 2011) as a drawdown pension when the member has reached age 75

The same as the above applies where the pre-commencement pension is being paid from a scheme at the point of that first BCE as an alternatively secured pension or from 6 April 2011 as drawdown pension and the member has reached age 75.

An alternatively secured pension is only available to individuals over the age of 75, and no BCE (except BCE 3) can occur after age 75. So this would only be relevant where the first event triggering the test was the augmentation of another pre-commencement pension being paid as a scheme pension beyond the permitted margin (so caught through BCE 3). Here the pre-commencement scheme pension being augmented would also be deemed to crystallise - see RPSM11104970.