Scheme-Specific Tax Free Cash

amelia1983

Hi,
I don't suppose anyone has any idea when the government will confirm the calculations for SSTFC? I have a few clients who would like to start their pensions but we are unable to do so due to the legislation.
Thanks

les_cameron

You should ask the scheme if they will pay based on the intent, some will.

amelia1983

Thanks Les. This is the response I have had from two providers:

'My payment team have advised that at the moment, due to recent changes in the pension legislation we are unable to pay out protected tax free cash at this time and HMRC have advised that there is no timescale for this to be re-instated'.

Really helpful for client's who want to take their funds.

One did say that they potentially could pay it out, if the client signed something to confirm that they are aware that they could be liable to an unauthorised payment charge if they wanted the funds now. Obviously, this has put them off wanting to take the lump sum at this point.

It is just frustrating that we are stuck in limbo waiting for an unknown period of time for a decision.

les_cameron

Yes, the draft law was drafted and works. Election just got in the way.

I don't believe there is an unauthorised payment risk as the current calc actually gives a higher amount than the intended one. If they pay based on intent there's not really any UP risk at all.

benjaminfabi

@les_cameron said:
I don't believe there is an unauthorised payment risk as the current calc actually gives a higher amount than the intended one. If they pay based on intent there's not really any UP risk at all.

Unless client has FP/IP, in which case it is very annoying! We've just agreed to get one paid out by a scheme that will pay based on current drafting i.e. member gets less. But this being preferred to the risk that we get a negative change in the rules before the correction to the drafting.

les_cameron

@benjaminfabi said:

@les_cameron said:
I don't believe there is an unauthorised payment risk as the current calc actually gives a higher amount than the intended one. If they pay based on intent there's not really any UP risk at all.

Unless client has FP/IP, in which case it is very annoying! We've just agreed to get one paid out by a scheme that will pay based on current drafting i.e. member gets less. But this being preferred to the risk that we get a negative change in the rules before the correction to the drafting.

I think you mean pay out on intent. The current rules give people with an LTA over £1,073,100 more than they will under the intended rules, I don't think a scheme will pay out these on current drafting as their is the UP risk. There is th eother flaw needing fixed too which gives everyone a higher amount currently.