November 2008 | ||||||||||||||
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Alliance Trust Full SIPP – Protected Rights Transfers | ||||||||||||||
We are delighted to inform you that from 1st December existing Full SIPP members can apply to transfer protected rights into their Full SIPP. | ||||||||||||||
Transfer requests | Documentation requirements | Submitting documentation | Fees for protected rights | Income drawdown Annuity purchase | Death benefits | Planned changes from 2012 | Further information | ||||||||||||||
Transfer requests If your client already holds a Full SIPP, they can apply to transfer protected rights into their SIPP. We will accept transfers of uncrystallised protected rights but will not accept transfers of crystallised protected rights. Although we will accept protected rights transfer requests, we will not allow individuals to contract-out of the State Second Pension through the Full SIPP. It will therefore not be possible for contracted-out rebates to be paid into the Full SIPP. Documentation requirements The following table details our documentation requirements for transfers of protected rights. All documentation is available to download at www.alliancetrust.co.uk/adviser within the Literature Centre.
We require a separate Cater Allen bank mandate to be completed by those members who do not already hold protected rights in their Full SIPP. The regulations require that the protected rights benefits are separately identified from any other benefits. Accordingly, for clients who wish to invest their protected rights in other investments it will be necessary for these to be held separately. For example, if they wish to hold their protected rights investments with a stockbroker or investment manager, then it would be necessary to open an account with the stockbroker or investment manager for those rights. There will be no additional investment restrictions for protected rights plans. If you have agreed with your client to receive adviser remuneration on the protected rights portion of the SIPP, please download and complete a Full SIPP Adviser Remuneration form. Submitting documentation All documentation should be sent to our Full SIPP Servicing team at: Alliance Trust Full SIPP, Alliance Trust Savings Limited, PO Box 164, Meadow House, 64 Reform Street, Dundee, DD1 9YP. Once we have received confirmation and monies from the transferring scheme, we will inform you and send you the Transfer In Certificate. Fees for protected rights (a) Protected rights transfer fee A transfer fee of £100 plus VAT will apply to all protected rights transfers. (b) Protected rights annual fee There will also be a £100 plus VAT annual fee for the protected rights plan. The normal annual fee will apply to the non-protected rights plan. (c) Pension benefit fees When benefits are taken from a protected rights plan our normal pension benefit charges (e.g. annuity purchase fee, drawdown fees) will apply separately to the protected rights plan. Examples of how our fees work for protected rights can be found by clicking here. Income drawdown It will be possible to take pension benefits in the form of income drawdown prior to age 75 using the whole or part of a protected rights fund. A Pension Commencement Lump Sum of up to 25% of the value being used for benefits will also normally be available. The same income limits apply to protected rights and non-protected rights. Where benefits are being taken from both the protected rights and non-protected rights funds, the level of benefits taken from the protected rights fund can not be proportionally higher than that taken from the non-protected rights fund. It is not possible for benefits just to be taken from the protected rights fund whilst deferring benefits from the non-protected rights fund. Therefore, this means that when benefits are being taken it is not possible to deplete the protected rights fund at a faster rate than the non-protected rights fund. Annuity purchase An annuity must be purchased using the whole of the protected rights funds prior to age 75. It will not be possible to withdraw an income under the Alternatively Secured Pension (ASP) rules using a protected rights fund within the Alliance Trust Full SIPP due to complexities on death. Death benefits The position on death for protected rights differs to that for non-protected rights. If a member is married or has a civil partner, no lump sum can be paid. All of the fund must be used to provide an income for the surviving spouse or civil partner. If a member is not married or has no civil partner when they die then a lump sum can be paid to a person nominated by the member during their lifetime. If no person has been nominated then the fund will be paid to the member’s estate. All lump sums will be treated as forming part of the estate of the deceased member. Accordingly, inheritance tax may be payable on this sum. In addition, if the member was in income drawdown when they died an additional 35% tax charge will apply to any lump sum paid. Planned changes from 2012 The Government is planning to abolish contracting-out within defined contribution pension schemes from 2012. Accordingly, at that time, the need to keep protected rights separate from non-protected rights may disappear. If so, we will look to merge protected rights plans with non-protected rights plans. Further information If you require any further information on protected rights, please contact us on 01382 573600 or email advisersupport@alliancetrust.co.uk | ||||||||||||||
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