Does MPAA apply to all your DC pots?

DominicH

Say you are over 55 and have three DC pension pots of £100,000 each. If you start flexibly drawing down from one of the pots, I understand that that will trigger MPAA, so that from then on you can pay in a maximum of £4,000 pa.

But does that apply only to the pot from which you drew, or to all of them?

I'm guessing the answer is 'all', i.e. that flexible draw-down from a DC pension is a Crossing-the-Rubicon type of thing and once you have done it, your payments into any DC pot are limited, for ever? The examples I have seen all discuss MPAA in the context of a single DC pot, and do not make this point clear.

Marcon

To all of them, from the day you first 'flexibly access' any of your DC benefits from any of your pots.

Brynsam

It's the Money Purchase Annual Allowance, so applies to any DC pots.

Albermarle

If you look at from the other angle, you are allowed to open as many DC pensions as you like , because effectively they all collectively operate under the same rules, when it comes to tax relief, annual allowance, MPAA, tax free cash , LTA etc 
There are no tax advantages to be gained from having one or ten pensions.

NottinghamKnight

DominicH said:

Say you are over 55 and have three DC pension pots of £100,000 each. If you start flexibly drawing down from one of the pots, I understand that that will trigger MPAA, so that from then on you can pay in a maximum of £4,000 pa.

But does that apply only to the pot from which you drew, or to all of them?

I'm guessing the answer is 'all', i.e. that flexible draw-down from a DC pension is a Crossing-the-Rubicon type of thing and once you have done it, your payments into any DC pot are limited, for ever? The examples I have seen all discuss MPAA in the context of a single DC pot, and do not make this point clear.

You can take the pcls from each and won't be restricted if you don't take anymore, so 25% from one, then from the second etc

mark55man

I think I'm right (but would appreciate confirmation) that even if MPAA you can still salary sacrifice more than the MPAA limit, as the limit only applies to your own contributions not those of your employer.  So if your current (or future) employer offers salary sacrifice you can trigger the MPAA but still have payments to your pension up to the Annual allowance 

EdSwippet

mark55man said:

I think I'm right (but would appreciate confirmation) that even if MPAA you can still salary sacrifice more than the MPAA limit, as the limit only applies to your own contributions not those of your employer.  So if your current (or future) employer offers salary sacrifice you can trigger the MPAA but still have payments to your pension up to the Annual allowance.

I'm pretty sure that's wrong. For example, paragraphs 2.2 and 2.3 of this document:

Reducing the money purchase annual allowance: consultation response

2.2 The MPAA applies to aggregate employer/employee contributions. ...

EdSwippet

DominicH said:

Say you are over 55 and have three DC pension pots of £100,000 each. If you start flexibly drawing down from one of the pots, I understand that that will trigger MPAA, so that from then on you can pay in a maximum of £4,000 pa.

As an aside, note that if you do this, it is then up to you to inform your other pension schemes that you have triggered the MPAA. 

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm166400

Brynsam

Wrong I'm afraid. It's £4K from all sources, including any tax relief on personal contributions.

You can pay in more (if the pension provider allows it), but won't get any tax relief. 

Dazed_and_C0nfused

Brynsam said:

Wrong I'm afraid. It's £4K from all sources, including any tax relief on personal contributions.

You can pay in more (if the pension provider allows it), but won't get any tax relief. 

I think it's only "relief at source" that is counted, not any personal tax relief obtained from the contribution.

Linton

Dazed_and_C0nfused said:

Brynsam said:

Wrong I'm afraid. It's £4K from all sources, including any tax relief on personal contributions.

You can pay in more (if the pension provider allows it), but won't get any tax relief. 

I think it's only "relief at source" that is counted, not any personal tax relief obtained from the contribution.

It is £4K Gross from any source ie what money actually ends up in your pensions.  Tax relief is irrelevent.