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Contributed by MW Pensions
31 March, 2012

Contributed by MW Pensions. [www.mwpensions.co.uk]

This leaflet is solely for the use of financial and other professional advisors, members of the public should not rely upon it

This leaflet explains the position regarding Protected Rights after 
6th April 2012

What happens from 6th April 2012?
Protected Rights for Defined Contribution schemes are abolished from that date.

What does this mean for Defined Contribution Schemes?
There are several consequences:

  • There will be no more contracted rebates
  • Existing Protected Rights funds become “ordinary” funds, although some provider’s systems may not be updated to reflect this
  • The special death benefit requirements for Protected Rights cease for deaths on or after 6.4.12
  • The proportionality rules cease
  • SSASs can accept Protected Rights– but the Rules of the SSAS may need changing – consult a lawyer
  • Protected Rights funds can be invested exactly as non-Protected Rights funds

So we can forget all about Protected Rights funds after 6.4.12?
Sadly no. If anyone died before 6.4.12 with Protected Rights funds, their death benefits will be based on pre 6.4.12 rules and so, even though the resultant death benefits may be paid out in practice after 6.4.12, the pre-6.4.12 rules will still apply. So pension administrators will have to maintain historic Protected Records until they are satisfied that they have been notified of all pre-6.4.12 deaths.

What about Flexible Drawdown?
Protected Rights can be used for Flexible Drawdown post 6.4.12.

MW Pensions Ltd
Oaklands Park
Hooton Road
South Wirral 
CH66 7NZ

Tel: 0151 328 1777 Fax: 0151 328 0707

website: www.mwpensions.co.uk e-mail: admin@mwpensions.co.uk

Authorised and Regulated by the Financial Services Authority



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