Stand-out Q – enhanced protection…


FRI, 24 MAR 2017

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Is enhanced protection lost on transfer from a final salary scheme to a SIPP?


It depends on the outcome of the test for relevant benefit accrual.

Where relevant benefit accrual occurs enhanced protection is lost. The test for relevant benefit accrual under a final salary scheme is done at the time of a benefit crystallisation event or on transfer to an other money purchase type arrangement e.g. a SIPP. Where it is carried out on transfer, the transfer value is compared to the appropriate limit. If the transfer value is more than the appropriate limit relevant benefit accrual is deemed to have occurred.

The appropriate limit is the greater of two values. PTM092430 gives more detail.

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