PTM062740 - Member benefits: pensions: drawdown pension rules applying from 6 April 2015: flexi-access drawdown fund - where member had designated funds in an arrangement into a flexible drawdown pension fund before 6 April 2015
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Glossary |
Automatic conversion to flexi-access drawdown fund
Annual allowance consequences
Taxation
Automatic conversion to flexi-access drawdown fund
Paragraphs 7, 8, 8A (1) and (2)(b) Schedule 28 Finance Act 2004
Where a member designated funds as available for the payment of drawdown pension before 6 April 2015 and qualified to take their pension as flexible drawdown (see PTM062580 onwards for more detail) then on 6 April 2015 the sums and assets so designated were member-designated funds (as are any sums or assets held for the purpose of the arrangement which arise directly or indirectly from such member-designated funds or from sums or assets which so arise or derive) provided at 5 April 2015 they had not been applied towards the provision of a scheme pension.
As of 6 April 2015, the member鈥檚 flexible drawdown pension fund automatically converted into a flexi-access drawdown fund, the funds ceased to be member-designated funds and become newly-designated funds.
Any designations of sums or assets for drawdown on or after 6 April 2015 under the arrangement holding this drawdown fund will go into the flexi-access drawdown fund.
From 6 April 2015 therefore, drawdown pension can continue to be taken from the arrangement in line with the guidance on flexi-access drawdown pensions at PTM062730.
Annual allowance consequences
The money purchase annual allowance rules (see PTM056500) apply to the member from the beginning of 6 April 2015. This is because the automatic conversion of a flexible drawdown pension fund to a flexi-access drawdown fund on that date constitutes flexible access for the purpose of the annual allowance.
Taxation
The position is the same as described on PTM062730.