SCHEDULES

SCHEDULE 16Benefits under pension schemes

Part 1Changes to benefits available under pension schemes etc

Unsecured and alternatively secured pension to be replaced by drawdown pension

1

1

In Part 4 of FA 2004 (pension schemes etc), section 165 (pension rules) is amended as follows.

2

In subsection (1)—

a

in pension rule 4—

i

for “If the member has not reached the age of 75, no payment of pension” substitute “ No payment of pension ”, and

ii

for paragraph (c) substitute—

c

drawdown pension,

b

for pension rule 5 substitute— “ Pension rule 5 The total amount of drawdown pension paid in each drawdown pension year in respect of a money purchase arrangement must not exceed 100% of the basis amount for the drawdown pension year. ”;

c

omit pension rules 6 and 7.

3

After subsection (3) insert—

3A

This subsection applies to an arrangement if—

a

the member meets the flexible drawdown conditions,

b

the member makes a valid declaration to the scheme administrator to that effect, and

c

the declaration is accepted by the scheme administrator.

3B

The member meets the flexible drawdown conditions if—

a

the member satisfied the minimum income requirement on the relevant day,

b

no relevant contributions are paid under any money purchase arrangement (other than a cash balance arrangement) relating to the member under a registered pension scheme in the tax year in which the declaration is made, and

c

at the time of the declaration the member is not an active member of any registered pension scheme under which there is a defined benefits or cash balance arrangement relating to the member.