RPSM12306040 - Scheme Administrator Pages: Information Requirements and Administration: Scheme pension or lifetime annuity provided by insurance company: Transfers between insurers

Transfer of a scheme pension or lifetime annuity between insurance companies

[Reg 17A The Registered Pension Schemes (Provision of Information) Regulations 2006 - SI 2006/567]

Where an insurance company paying either a scheme pension or lifetime annuity transfers funds and responsibility for ongoing payment of that scheme pension or lifetime annuity to another insurance company the original insurer has a responsibility to provide the new insurer with certain information. The new insurance company becomes responsible for continuing to provide the member with statements of the percentage of standard lifetime allowance used up.

Where the transfer has been made in accordance with either regulation 4 or 6 of the Registered Pension Schemes (Transfer of Sums and Assets) Regulations 2006 - SI 2006/499 - the original insurer must provide the new insurance company with the following information within 3 months of the transfer.

Information required where the scheme pension or lifetime annuity was not originally provided from drawdown pension funds

A statement of the percentage of the standard lifetime allowance used up by the benefit crystallisation events in respect of the pension or annuity plus any pension commencement lump sum paid in connection with the pension or annuity.

Information required where the scheme pension or lifetime annuity was originally provided from drawdown pension funds

Where the original insurance company was giving the member statements under regulation 17(3) because the annuity or pension was provided from only part of a drawdown pension fund a statement of the percentage of the standard lifetime allowance used up by the pension or annuity.

Where the original insurance company was giving the member statements under regulation 17(6) because the whole of the member’s drawdown pension fund was used to provide the pension or annuity a statement showing the percentage of the standard lifetime allowance used up found by the calculation A minus B

A is the total

• BCEs that have occurred under the scheme that held the drawdown pension fund to the extent that funds in respect of those crystallised benefits have not been transferred out to another registered pension scheme, plus
• any BCE 3 in respect of a scheme pension paid from the scheme, plus
• if the scheme that held the drawdown pension fund received a transfer in respect of that member (whether directly or indirectly) of crystallised rights any BCEs that occurred in respect of those crystallised rights before the transfer was received

B is the total of

• any BCE which has been the subject of a statement under regulation 17(2) - a previous purchase of a lifetime annuity or scheme pension from only part of the drawdown pension fund - see RPSM12306002, plus
• any BCE which has been the subject of a statement under regulation 16(3) - a scheme pension or lifetime annuity provided by an insurance company that did not originate from drawdown pension fund - see RPSM12306020, plus
• any BCE in respect of sums and assets still held by the scheme outside the drawdown pension fund, e.g. direct payment of a scheme pension by the scheme

Statements to be provided to the member

Following the transfer the new insurance company takes on responsibility for providing at least once a year a statement to the member of the percentage of the standard lifetime allowance used up. This requirement applies for the years up to an including the tax year in which the member reaches age 75. Although not required to do so, the insurer may choose to continue providing annual statements beyond the tax year in which the member is age 75.

Where the original insurer was providing the member with a statement under regulation 16(3) - scheme pension or lifetime annuity not originating from drawdown pension funds - the new insurer is responsible under regulation 16(3) for providing the statement. RPSM12306020 sets out the information required.

Where the original insurer was providing the member with a statement under regulation 17(3) - scheme pension or lifetime annuity originating from only part of a drawdown pension fund - the new insurer is responsible under regulation 17(3) for providing the statement. RPSM12306004 sets out the information required.

Where the original insurer was providing the member with a statement under regulation 17(6) - the whole drawdown pension fund used up to provide a scheme pension or lifetime annuity - the new insurer is responsible under regulation 17(6) for providing the statement. RPSM12306004 sets out the information required.

The percentage expressed on the statement should go to two decimal places (e.g. 25.55%). This should be a rounded down figure, so 25.558% becomes 25.55%.