Legacy workplace DC pension with protected tax free cash

TheGreenFrog

I have an old workplace pension which has protected tax-free cash.  This protected cash is the only reason I do not transfer it to my SIPP as the workplace scheme is not very flexible.  I have been in contact with the administrator with a few questions, but they avoid responding to any specific questions about my plan.  The questions I had are as follows, so hope someone might know:

• the protected tax free cash is well over 25% of the total pension pot.  I want to know what the reduction in my LSA will be if I take the full amount of tax-free cash.  I don't really understand why they will not give me this information, even just on an illustrative basis, as presumably they need to report it if I do take the cash.  For example, if my pot is £100k and the tax-free cash is £65k will the LSA be reduced by £25k or by £65k or some other number?  I think the answer may be £25k but need to know for sure
• I have an additional AVC plan attached to the workplace scheme.  The adminstrator of the workplace scheme says they have nothing to do with the AVC scheme and won't say what happens to it if I choose to take my workplace pension.  The previous administrator of the scheme (much better than the current ones) I think told me that when I took the workplace pension the AVC would also be included but I have no idea how it works

Notepad_Phil

TheGreenFrog said:

I have an old workplace pension which has protected tax-free cash.  This protected cash is the only reason I do not transfer it to my SIPP as the workplace scheme is not very flexible.  I have been in contact with the administrator with a few questions, but they avoid responding to any specific questions about my plan.  The questions I had are as follows, so hope someone might know:

• the protected tax free cash is well over 25% of the total pension pot.  I want to know what the reduction in my LSA will be if I take the full amount of tax-free cash.  I don't really understand why they will not give me this information, even just on an illustrative basis, as presumably they need to report it if I do take the cash.  For example, if my pot is £100k and the tax-free cash is £65k will the LSA be reduced by £25k or by £65k or some other number?  I think the answer may be £25k but need to know for sure
• I have an additional AVC plan attached to the workplace scheme.  The adminstrator of the workplace scheme says they have nothing to do with the AVC scheme and won't say what happens to it if I choose to take my workplace pension.  The previous administrator of the scheme (much better than the current ones) I think told me that when I took the workplace pension the AVC would also be included but I have no idea how it works

Sorry can't help with your second question, but regarding the LSA I had thought that the LSA reduction would be reduced by £65k but looking at https://techzone.abrdn.com/public/pensions/Tech-guide-tax-free-cash it seems that it will only be £25k:

• Pension commencement lump sums (PCLS) – the whole of the PCLS normally counts towards the LSA.
  
  However, if scheme-specific tax-free cash protection applies then the excess over 25% of the value of benefits crystallised is ignored. For example, if the benefits crystallised were £600,000 and scheme-specific tax-free cash protection provided a PCLS of £250,000, only £150,000 (25% of the benefits crystallised) would count towards the LSA and the £100,000 excess tax-free cash is ignored.

TheGreenFrog

Thanks @Notepad_Phil.  That's the confirmation I need.