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GLOSSARY

Alternatively secured pension definition

Published by a LexisNexis Pensions expert

What does Alternatively secured pension mean?

Available from a-day as a type of income drawdown for members from age 75 who wished to defer their pension payments.

A variation on unsecured pension, to accommodate religious objections to risk pooling, it allowed pensioners to receive an income from their pot of money by cashing units at intervals during the life of the fund. However, income was limited to a maximum of 70% of a single life annuity based on a purchasing age of 75. It involved payment of (taxable) income withdrawals direct from a money purchase arrangement to the member of the arrangement (who was aged 75 or over) and that met the conditions laid down in paragraphs 12 and 13 of Schedule 28 to the Finance Act 2004 (HMRC).

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Drawdown from 6 April 2015

THIS PRACTICE NOTE APPLIES IN RELATION TO MONEY PURCHASE ARRANGEMENTS FROM 6 APRIL 2015On 6 April 2015, pension flexibilities were introduced to widen the retirement options available to DC members and other members with 'flexible benefits' (essentially money purchase and/or cash balance benefits). As part of the flexibilities introduced, drawdown became more widely available.For more information on the pension flexibilities introduced on 6 April 2015, see Practice Note: Pension freedoms—an introduction.This Practice Note focuses on the legal regime applicable to drawdown arrangements created on and from 6 April 2015. It also considers the treatment of pre-April 2015 drawdown arrangements on and from that date.For information on the legal regime that applied to drawdown arrangements before 6 April 2015, see Practice Note: Drawdown between 6 April 2011 and 5 April 2015 [Archived].What is drawdown?The term ‘drawdown pension’ (sometimes referred to as 'flexible income') replaces the terms ‘unsecured pension’ and ‘alternatively secured pension’ which were used before 6 April 2011.Drawdown pension refers to the pension payment process which permits members to choose...

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