For most members of
registered pension schemes the lump sum rules
after 5 April 2006 are at least as favourable as the rules that
applied before that date.
However, there are some individuals whose lump sum rights
exceeded £375,000 (25% of the
standard lifetime allowance in 2006/07) on 5 April
2006. There are also be individuals whose lump sum rights exceed
25% of pension rights when the new system came in. For all of these
individuals, Schedule 36 of the Finance Act 2004 gives a degree of
protection for their lump sum rights as they stood on 5 April 2006.
The way that the legislation protects lump sum rights
exceeding £375,000 where primary or enhanced protection has
been claimed is different from the way lump sum rights exceeding
25% of pension rights are protected. The chart on
RPSM03105020 shows what type of lump
sum protection an individual will be entitled to.
The different ways in which the legislation gives protection
to the lump sum rights are dealt with in the following pages of
this part of the guidance.
RPSM03105135 to
RPSM03105182 details how protection
of lump sum rights of more than £375,000 with primary
protection works.
RPSM03105185 to
RPSM03105230 details how protection
of lump sum rights of more than £375,000 with enhanced
protection works
RPSM03105500 to
RPSM03105642 details how protection
of uncrystallised lump sum rights of more than 25% works. This
protection will not operate where an individual has total lump sum
rights of more than £375,000 and they have claimed either
enhanced or primary protection (or both).
|
| Glossary ( RPSM20000000) |
