TFLS if you have Civil Service Alpha DB and a large DC Pot?

michaels

How much TFLS can you take if you have a sipp and DB.  Commutation rates would seem to mean it makes sense to take all from the sipp if allowed and not take any reduction in the DB.

What if you also plan to take the DB early with an actuarial reduction, would that reduce the size of the calculated 25% of total pot?

Finally how would any of this impact on the MPAA?

Thanks for any pointers

Marcon

michaels said:

How much TFLS can you take if you have a sipp and DB.  Commutation rates would seem to mean it makes sense to take all from the sipp if allowed and not take any reduction in the DB.

What if you also plan to take the DB early with an actuarial reduction, would that reduce the size of the calculated 25% of total pot?

Finally how would any of this impact on the MPAA?

Thanks for any pointers

25% from the SIPP and whatever the rules of the DB scheme say you can/must/can choose to take - but you can't take more than 25% from the DC scheme even if you take no cash from the DB scheme. In practice different schemes are always considered separately in terms of tax free cash.

Taking your DB pension early won't have any impact on the 25% tax free from your DC pot, but you will have a smaller amount of tax free cash from your DB pension.

The MPAA is triggered if you take any potentially taxable amount from your SIPP i.e. anything in excess of tax free cash, however small. One way to (help) avoid this is to set up 3 smaller DC pots each of no more than £10,000. You can then take one or more of these provided you have reached age 55 (or 57, from April 2028), specifying that you want to do so under the 'small pots' regime, and it won't trigger the MPAA and uses 0% of your Lifetime Allowance, so can be handy things to have. 

Taking a DB pension, with or without tax free cash, won't trigger the MPAA.

marlot

>> How much TFLS can you take if you have a sipp and DB. 
>> would that reduce the size of the calculated 25% of total pot?

Each scheme is treated separately.  You can't combine them to find your 25%.

michaels

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

Dazed_and_C0nfused

michaels said:

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

No, I think you are correct but that seems unique to LGPS

marlot

michaels said:

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

I had one DB pension that allowed me to combine an associated AVC, but those are rare.  Alpha isn't one of them, unfortunately.

Silvertabby

Dazed_and_C0nfused said:

michaels said:

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

No, I think you are correct but that seems unique to LGPS

That only applies when the DC is in the form an in--house AVC.  SIPPs etc can't be linked in this way 

michaels

Silvertabby said:

Dazed_and_C0nfused said:

michaels said:

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

No, I think you are correct but that seems unique to LGPS

That only applies when the DC is in the form an in--house AVC.  SIPPs etc can't be linked in this way 

Yes, my thinking was that if an external sipp was separate then could I transfer my sipp into the civil service sipp (CSAVCS?) and then have it and alpha treated as a single 'entity'.

Silvertabby

michaels said:

Silvertabby said:

Dazed_and_C0nfused said:

michaels said:

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

No, I think you are correct but that seems unique to LGPS

That only applies when the DC is in the form an in--house AVC.  SIPPs etc can't be linked in this way 

Yes, my thinking was that if an external sipp was separate then could I transfer my sipp into the civil service sipp (CSAVCS?) and then have it and alpha treated as a single 'entity'.

Don't know if the CS will allow that.  There are more than a couple of CS experts on these boards, so one should be along shortly....

Marcon

michaels said:

Silvertabby said:

Dazed_and_C0nfused said:

michaels said:

Thanks both. The other thread on lgps seemed to suggest you could combine the db and DC elements for lump sum calcs but I guess I misunderstood.

No, I think you are correct but that seems unique to LGPS

That only applies when the DC is in the form an in--house AVC.  SIPPs etc can't be linked in this way 

Yes, my thinking was that if an external sipp was separate then could I transfer my sipp into the civil service sipp (CSAVCS?) and then have it and alpha treated as a single 'entity'.

Taken from https://www.civilservicepensionscheme.org.uk/your-pension/managing-your-pension/increase-your-pension/civil-service-additional-voluntary-contribution-scheme-csavcs/:

In addition to the tax-free cash available from your main scheme, you will be able to take up to 25% of your AVC fund as a tax-free lump sum. If your plan is with Legal & General, other options will also be available to you. Please contact Legal & General for more information.

Can I combine the tax-free allowances from my main Civil Service pension and my CSAVCS pension? 

The CSAVCS is treated separately to your main Civil Service pension scheme benefits. The scheme rules state you cannot combine the tax-free allowances from each scheme.

michaels

Thanks all.  It was a nice thought