RPSM03201010 - Member Pages: Protecting pension rights from tax charges: Types of protection available

Types of protection from the lifetime allowance charge and other protection

There are two types of protection available for which you must register with HMRC by April 5 2009. These are known as primary protection and enhanced protection.

You may want to protect your existing pension and lump sum rights because:

• The value of your benefits (your fund value if you have money purchase benefits) exceeds the standard lifetime allowance of £1.5 million at 5 April 2006,
• The value of your benefits (your fund value if you have money purchase benefits) is below £1.5 million at 5 April 2006 but may exceed the standard lifetime allowance applicable when they are put into payment,
• Your lump sum from your pension scheme(s) exceed £375,000 as valued at 5 April 2006 and you are registering for primary protection and/or enhanced protection. See RPSM03201040.
• You have received pension credit rights from a pension sharing order following a divorce before 6 April 2006 - see RPSM03201050.

You can register for primary and/or enhanced protection.

In addition further protection is available for

• Your lump sum entitlement from any pension scheme where it is greater than 25% of your rights in that scheme. See RPSM03201060.
• The payment of a lump sum death benefit under a five year guarantee. See RPSM03201070.
• You have a right to take your pension and lump sum benefits before age 55, without the consent of the employer or scheme trustees. See RPSM03201080.

You do not have to register for this further protection which will be available at the scheme administrator’s discretion.