Pension Schemes - Frequently Asked Questions

 

Transfers

Occupational Pension Schemes

Q. Does the relaxation on transfers at or after normal retirement date announced in Pensions Update No 109 apply to schemes with an agreed low normal retirement date?

A. Yes, subject to the following conditions

  • the scheme with the low normal retirement date (as defined in Appendix I of Practice Notes (IR12(2001)) must have an approved "late retirement" rule - the member, having continued in the employment to which the low normal retirement date relates, is able to defer the payment of benefits beyond [the low] normal retirement date
  • the transfer request is made before the latest date by which benefits must come into payment under the "late retirement" rule - for example the "late retirement" rule for a scheme with a normal retirement date of age 35 might stipulate that benefits must come into payment at age 40, even though the member continues in the employment (to which the low normal retirement date relates) beyond that later date
  • the transfer request is made before the member leaves the employment to which the low normal retirement date relates - it is assumed that under any "late retirement" rule that leaving the employment after [the low] normal retirement date will trigger the payment of benefits
  • where the normal retirement date is age 45 or lower, the transferred benefits in the receiving scheme must be paid no later than would have been the case under the transferring scheme - the last paragraph of Practice Notes (IR12(2001)) 16.21 refers.

It should be noted that some low normal retirement dates may have been approved subject to there being no "late retirement" rule. The effect of such a condition would require benefits to come into payment at [the low] normal retirement date where a member remains in the employment, to which the low normal retirement date relates, beyond [the low] normal retirement date. In such circumstances, a transfer cannot take place at [the low] normal retirement date as an alternative to taking benefits.

Q. Transfers in specie, when should the asset for transfer be valued?

A. An independent valuation should be carried out immediately prior to the transfer. The transfer should then generally proceed forthwith but in recognition of the fact that for an asset such as property, legal transfer of title can take a little while, the transfer valuation date may, in these circumstances, be at any date within 2 months of the proposed transfer date.


Personal Pensions

Q. I have recently emigrated and wish to transfer my personal pension fund to the country to which I have moved. Is this possible?

A. It may be possible to transfer your personal pension fund to an overseas pension scheme. You have to be resident, working and a member of a pension scheme in the country you now live. If at the date of the proposed transfer you are a controlling director or high earner your UK provider would need to see written confirmation from this office that the transfer could proceed. If you fall into one of these categories, we require an application in writing confirming your details plus the amount of the fund to be transferred in order to process your application. If you do not fall in either category, the transfer can be processed by your provider without application to this office.

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