RPSM11300100 – Administrator Pages: Lifetime allowance: How the lifetime allowance is operated

What happens if an individual reaches age 75 but cannot be contacted

If a member has reached age 75, and

• as a result, a benefit crystallisation event (BCE) has occurred; this will be either a BCE 1 for uncrystallised rights in money purchase arrangements, a BCE 5 for prospective rights in defined benefit arrangements or a BCE 5A where the member has previously designated funds as available for the payment of an unsecured pension; and
• the member is untraceable or the Scheme Administrator has been unable to contact the member to obtain details of the available lifetime allowance (but not including the situation where a member can be contacted but fails to respond).

In an instance such as this, the Scheme Administrator is entitled to make a commercial judgement based on the available information and the particular circumstances of the case as to whether a lifetime allowance charge should apply.

In the event of any subsequent discovery that a lifetime allowance charge was due but was not returned, APSS would need to be satisfied that the judgement exercised by the Scheme Administrator was appropriate in the circumstances in order to operate the good faith discharge of tax liability.