E7.233 Uncrystallised funds pension lump sums (UFPLS)

For the latest New Developments, see ND.2718.

An uncrystallised funds pension lump sum (UFPLS) is an authorised payment that can be made to a member from uncrystallised funds (see below) within a money purchase arrangement. UFPLS have been available since 6 April 2015 and are an essential plank of the 'freedom and choice' reforms under which benefits from registered pension schemes do not have to be taken as a pension or an annuity. See E7.201B for member's choices. A UFPLS cannot be paid from collective money purchase arrangements.¹

Uncrystallised funds are funds held in respect of the member which have not, as yet, been used to provide that member with a benefit under the scheme (eg used to buy an annuity or to enter into drawdown, either of which would enable a pension commencement lump sum (PCLS, see E7.232) to be taken). If the money purchase arrangement is a cash balance arrangement, uncrystallised funds in the arrangement are the funds there would be in the arrangement if the member decided to draw benefits