MPAA Trigger

Mikey481

Hi everyone 
Does starting to take benefits from a DB scheme trigger MPAA 
Thanks in advance

garmeg

Mikey481 said:

Hi everyone 
Does starting to take benefits from a DB scheme trigger MPAA 
Thanks in advance

No, MPAA applies to DC pensions only.

Mikey481

Great appreciate your quick response 

Brynsam

garmeg said:

Mikey481 said:

Hi everyone 
Does starting to take benefits from a DB scheme trigger MPAA 
Thanks in advance

No, MPAA applies to DC pensions only.

And then only when you take DC benefits 'flexibly'. If you take tax free cash and buy an annuity with the remainder, the MPAA isn't triggered; nor is it triggered if your DC pot is worth under £10K and you take it under a regime known as the 'small pots' regime.

Mikey481

OK so if i can just explain a bit more i plan to start taking benefits from my DB scheme (left the scheme in 2017) next month at 60. Will take the maximum tax free lump sum and start a new role this month which will be  a salary sacrifice scheme. So MPPA will not be triggered?

Dazed_and_C0nfused

No it won't and you won't be contributing to a pension either.

Salary sacrifice is where you agree to a reduced salary in return for your employer contributing to your pension.  That is why there is no pension tax relief on salary sacrifice pension contributions as they are employer contributions.

Mikey481

Thanks that makes life much less complicated !