Mailings

Thursday 26 February 2009

Pension Protection - deadline 5 April 2009 - Final Reminder

The 5th April 2009 is the deadline for registering clients for Primary and Enhanced protection. This is our final reminder for any of your clients who may need to register. As protection applies to all of a clients pension arrangements we may not know who should register, and you will need to take all of your clients' retirement plans into account. The main points to consider are:

• Members with large pension funds (currently £1.65 million) will suffer a Lifetime Allowance charge on the funds in excess of this limit when they draw benefits.
• It is possible to be excluded from the test by applying for protection.
• To apply, members must not be over-funded on their pre A Day benefits.
• Any contributions paid since 5 April 2006 for a member's benefit will restrict the options available for protection.
• The Lifetime Allowance currently increases each year. However HMRC recently announced that between the years 2010/11 to 2015/16, the limit will be set at £1.8 million and will NOT increase.
• In the majority of cases there will be a second Lifetime Allowance test at age 75. This test is based on the growth of the member's fund share between the date of retirement and age 75.
• If clients believe they may be affected by the Lifetime Allowance when they retire and wish to apply for protection then action needs to be taken immediately.
• An application for protection is based on all pension arrangements held by the client and is not just in respect of benefits contained within the pension arrangements operated by IPS.

If you have any queries on these issues, please speak to your usual contact.

The IPS Partnership