RPSM11200020 - Member Pages: Lifetime allowance: Taking benefits: When to provide information needed by the scheme administrator.

When does the member have to pass information to the scheme administrator?

When do I have to provide information?

When an entitlement to a benefit arises or when the scheme administrator requests details of the amount of lifetime allowance used up. The member should provide the information to enable the scheme administrator to calculate the lifetime allowance used and whether a lifetime allowance tax charge arises because the allowance has been exceeded. The legislation specifies the occasions when an individual will use up all or a part of their lifetime allowance, There are different occasions when this happens and they are known as benefit crystallisation events (BCEs) (see RPSM11102020)

A member becomes entitled to a pension benefit when they have an actual right to receive a benefit having fulfilled any conditions.

How will this happen in practice

This will happen

• when a member approaches their normal retirement date. The administrator will then ask the member to provide a statement confirming the level of lifetime allowance available on the date benefits come into payment and whether or not the member anticipates any other benefits coming into payment at or around the same time. The administrator will also ask if the member is entitled to an enhanced lifetime allowance and if they are for the number on the certificate issued by HMRC showing the exact level of enhancement. or
• if a member makes a decision to take benefits at a point other than their retirement date. In which case they must inform the scheme administrator of the amount they want to take. The scheme administrator will write to say how much scheme benefit has crystallised and the percentage of the standard lifetime allowance it represents.

If a member takes more than one type of benefit paid simultaneously, then the scheme administrator will ask the member what order he wants these to be considered for lifetime allowance purposes (see RPSM11103520)