Linda made a valid claim for enhanced protection. The amount of
her protected lump sum rights is 20%.
In March 2007 Linda took benefits worth £1million. She
did not tell her
scheme administrator that she was covered by
enhanced protection and had protected lump sum rights. So the
scheme administrator paid Linda a
pension commencement lump sum of £250,000 and
the remaining £750,000 was designated as
unsecured pension fund.
Linda was only entitled to a pension commencement lump sum of
£200,000, so she has received an
unauthorised member payment of £50,000. Linda
is liable to an unauthorised payments charge of £20,000 (40%
of £50,000). The scheme administrator is not liable to a
scheme sanction charge due to the operation of paragraph 30
Schedule 36.
| Glossary ( RPSM20000000) |
