RPSM03104097 - Technical Pages: Protecting pension rights from tax charges: Enhanced protection: Cessation: Impermissible transfers

Cessation of enhanced protection – impermissible transfers

A transfer, or other action, that is defined as an impermissible transfer will cause enhanced protection to be lost.

The following are impermissible transfers into a money purchase arrangement that is not a cash balance arrangement (an other money purchase arrangement).

• A transfer of sums or assets from an arrangement under a registered pension scheme not relating to the individual. However, a transfer pursuant to a pension sharing order is not an impermissible transfer and will not cause the loss of enhanced protection (but see RPSM03104061).
• A transfer of sums or assets which were held otherwise than by a pension scheme.
• The payment of a transfer lump sum death benefit into the arrangement. A transfer lump sum death benefit cannot be paid in respect of a member who dies after 5 April 2007.

There is an impermissible transfer if at any time after 5 April 2006 there has been a transfer or payment, of the type specified above, to a hybrid arrangement and that hybrid arrangement later becomes an other money purchase arrangement .

There is an impermissible transfer if at any time after 5 April 2006 a defined benefits arrangement or a cash balance arrangement for an individual becomes an other money purchase for that individual under that scheme.