Block transfers and pension schemes
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Block transfers and pension schemes

The following Pensions guidance note Produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Block transfers and pension schemes
  • Right to keep a protected pension age after transfer
  • Right to keep scheme specific lump sum protection after transfer
  • Block transfers
  • Historic transitional provisions
  • Scheme wind-ups
  • Difficulties with block transfers

As a general rule, members of registered pension schemes can only start receiving their pension benefits from such schemes from age 55 (prior to 6 April 2010, from age 50) unless they satisfy the ill-health condition. As a second general rule, members of registered pension schemes are only able to take up to 25% of the value of their accrued pensions savings (subject to the lifetime allowance) as tax-free cash.

There are, however, certain individuals who are exceptions to these general rules and who are able (subject to the rules of their particular schemes) to:Finance Act 2004, Sch 36, paras 21–23Registered Pension Schemes (Prescribed Schemes and Occupations) Regulations 2005, SI 2005/3451

  1. claim their benefits before age 55—they are said to have a ‘protected minimum pension age’. For more information, see Practice Note: Normal minimum pension age and protected pension age—What is a protected pension age? or

  2. take more than 25% of the value of their pension savings in the form of tax-free cash—they enjoy ‘scheme specific lump sum protection’. For more information, see Practice Note: Pension commencement lump sums (PCLSs)—Protection of pre A-day rights to tax-free lump sums

Such individuals typically were in prescribed occupations prior to the introduction of the registered pension scheme regime on 6 April 2006 (A-Day) or otherwise satisfied prescribed conditions immediately prior to 6 April 2010 which permitted them to continue to enjoy their favoured rights as regards minimum pension age and/or tax-free cash after A-Day and/or 6 April 2010.

Such protections can be valuable; however, rights to such protections can be lost if accrued benefit rights are transferred from one pension arrangement to another unless certain