Stand-out Q – legacy pension…


TUE, 25 NOV 2014

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A client has a legacy pension plan where the only option is to purchase an annuity when crystallising their benefits and taking the PCLS. The arrangement has scheme specific lump sum protection. Could they transfer this plan to their SIPP, which they have held for three years?

Under the easement in the Finance Act 2014, there is an additional definition of a block transfer. Prior to this, to satisfy the block transfer rules, an individual had to transfer their rights with at least one other individual and the receiving arrangement could not have been in place for more than twelve months. The new definition removes the requirement for the rights to be transferred concurrently with one other individual, but more importantly in this context, there is no mention of the 12 month condition. The individual could therefore transfer to their existing three year old SIPP and retain the protection, as long as the transfer took place before 6 April 2015 and they fully crystallised their SIPP before 6 October 2015. If they did not crystallise their benefits by that date, the protection would be lost.

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