Protected Rights

Curious_Moose

If you take a transfer value from a DB scheme, the portion of the TV relating to the GMP (what you got from contracting out of SERPS pre April 1997) is Protected Rights. Ok.

What about the transfer value in respect of service after April 1997 if the DB scheme continued to contract out with the SS2? I read somewhere that all of the post 97 service would count as Protected Rights when calculating a transfer value in this case.

This would seem a bit odd, as the PR was normally related to only the additional state pension (SS2 or SERPS) above the basic state pension and not the whole of the DB benefit.

Protected Rights are treated differently (less flexibly) than the excess part of the transfer value and so this would seem to be a disadvantage.

Any pensions technicians know the answer?

:beer:

EdInvestor

Curious_Moose wrote: »

What about the transfer value in respect of service after April 1997 if the DB scheme continued to contract out with the SS2? I read somewhere that all of the post 97 service would count as Protected Rights when calculating a transfer value in this case.

This is correct.

This would seem a bit odd, as the PR was normally related to only the additional state pension (SS2 or SERPS) above the basic state pension and not the whole of the DB benefit.

Indeed. Restrictions are being imposed here on no real basis.

Protected Rights are treated differently (less flexibly) than the excess part of the transfer value and so this would seem to be a disadvantage.

It certainly is, and for no justified reason.However,if current plans to enable PR money to be transferred to SIPPs go through, then this should no longer be a problem.

Hopefully this should happen from October.