Wow orgasmic - the draft SIPP Protected Rights proposals are really here !!!!!!!

EdInvestor

dunstonh wrote: »

We cant get the excellent ISA vs pension thread stickied so I wouldnt hold your breathe.

Fixed a while ago, courtesy browntoa, check it out.

wombat42_2

Looking at proposals and press coverage it looks as if being able to invest protected rights as a SIPP is a done deal but there is a fight on whether to allow protected Rights to be treated the same way as non-protected rights as regards spouses and annuites etc.

averageguy11

So does that mean although pr money can b transferred in2 a sipp (well proposed)..that portion of it still needs to b treated separately..re spouses annuity

Can pr money b commuted undr triviality rules?

EdInvestor

averageguy11 wrote: »

So does that mean although pr money can b transferred in2 a sipp (well proposed)..that portion of it still needs to b treated separately..re spouses annuity

It appears to mean that the money will have to be kept separate in the SIPP from non -PR money.This need not be a problem - it's an admin matter for the provider.

Once concern is that there seems to be no clarification about drawdown and ASP rules as they might apply to PR money.Drawdown is currently allowed for PR money, but technically AFAIK the age 75 annuity purchase rule still applies.

It's also unclear about whether the drawdown death benefit rule applies.More info on this area very welcome.

wombat42_2

EdInvestor wrote: »

It appears to mean that the money will have to be kept separate in the SIPP from non -PR money.This need not be a problem - it's an admin matter for the provider.

Once concern is that there seems to be no clarification about drawdown and ASP rules as they might apply to PR money.Drawdown is currently allowed for PR money, but technically AFAIK the age 75 annuity purchase rule still applies.

It's also unclear about whether the drawdown death benefit rule applies.More info on this area very welcome.

I think the draft proposals are saying that protected rights pensions are subject to sweeping changes as part of the 2007 Pension legislation anyway - to be implemented in about 2012.

Milarky

'£75 billion' headed towards SIPPs... No wonder the providers are Xcited- it's all the money built up since 1988 through personal rebates. Well, they can make hay for a while but rebates* end with those other 'reforms' in a few years don't they? So there won't be much more where that came from.

*Is 'contracted out employment' rebate (1.6%) which only covers the value of SERPS benefits alone to be retained when personal contracting out ends has anyone heard? This is money that 'goes' (via lower national insurance payments) into employer provided pensions. Given the pressure they are feeling and the government's wish to avoid too many Rovers and ASWs, I'd have thought they won't even try to touch that revenue.

EdInvestor

Contracting out into personal pensions and occupational money purchase pensions will be abolished from 2012 at the latest.But it will still apply to final salary pensions.

Thus there seems to be little point about having loads of separate rules for these pensions going forward.The only remaining rule ( it seems) will be the requirement to buy a spouse annuity.This means the money can't be merged with other pension money.

If all the other arrangments (drawdwon, ASP) are the same then this is not a major problem, as there is now an option not to take an annuity at all..But the position is not 100% clear.

wombat42_2

EdInvestor wrote: »

Contracting out into personal pensions and occupational money purchase pensions will be abolished from 2012 at the latest.But it will still apply to final salary pensions.

Thus there seems to be little point about having loads of separate rules for these pensions going forward.The only remaining rule ( it seems) will be the requirement to buy a spouse annuity.This means the money can't be merged with other pension money.

If all the other arrangments (drawdwon, ASP) are the same then this is not a major problem, as there is now an option not to take an annuity at all..But the position is not 100% clear.

The draft does say "However the Government is still considering whether the requirement for survivor’s benefits to be provided from protected rights should be retained." So we live in hope. I cant imagine anyone responding to the draft arguing in favour of retaining survivors benefits.

averageguy11

Jus a reminder about my othr point in earlier post ..can pr money be taken undr the 'trivial' rules?

EdInvestor

I don't know for sure, but I've never heard it mentioned that you can't, and since many trivial pensions will be PR related, I'd take a bet that you can.

Ring up your pension company and ask.