Normal Minimum Pension Age changes – new information released
18 January 2022
In the Pension Schemes Update 136, Her Majesty’s Revenue and Customs (HMRC) have provided additional information about the upcoming changes to the Normal Minimum Pension Age (NMPA).
Provided the Finance Bill (No.2) 2021 receives royal assent, the NMPA will rise from 55 to 57 on 6 April 2028. Members of some uniformed forces, such as firefighters, police and armed forces, will be exempt from the NMPA changes and will retain their previous age of 55 or below.
The bill also introduces a protective framework to allow individuals who fit certain criteria to claim their entitlements before the age of 57. Individuals qualify if they are either:
• Have an unqualified right to their entitlement on or before 4 November 2021
• In the process of a substantive transfer to a scheme on or before 4 November 2021
“A member has an unqualified right to take benefits if they do not need the consent of anyone before they can take their benefits. If the scheme documentation states that the consent of the trustees or employer is required to take benefits, the member does not have an unqualified right to take benefits.”
A scheme member will not lose their 2028 protections because of a block transfer as long as all of the following criteria are met:
• it’s a transfer of the pension rights relating to the member and at least one other pension scheme member
• the transfer is made as a single transaction
• the transfer represents all the pension rights under the scheme for all the members transferring as part of that single transaction
For individual transfers there is no requirement for the receiving scheme to have the protections, however the protections will only apply to the transferred assets. This will require the receiving scheme to ring fence the received assets to retain the protections on the transfer without enhancing the receiving scheme.
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