• GL
Choose your location?
  • Global Global
  • Australia
  • France
  • Germany
  • Ireland
  • Italy
  • Poland
  • Qatar
  • Spain
  • UAE
  • UK

Trustee action required before 6 April 2018 - Last chance to remove the Protected Rights Rules restrictions before special statutory power expires

05 March 2018
Tax | DWF
Trustees should review their scheme rules without delay to check whether Protected Rights Rules are hard-coded, whether any action has been taken to remove these Rules and if not, pass a resolution before 6 April 2018 to remove them now.
 

Contracting-out on a protected rights basis was abolished with effect from 6 April 2012. But references to Protected Rights Rules were hard-coded into many schemes' rules which means these references will survive past 6 April 2012 unless the rules are amended.  

If you do not change your rules before 6 April 2018 under the special statutory power then you are likely to be unable to do so because of other statutory restrictions on amendment. The power is exercised by the trustees by resolution.     

Why remove the Protected Rights Rules?

The Protected Rights Rules required schemes to meet certain conditions regarding protected rights. For example, protected rights had to be used to provide a spouse's pension when the member retired if he or she was married or had a civil partner (even if the member did not want a spouse's pension from other scheme benefits). Other restrictions applied to early retirement, commuting protected rights for tax free cash at retirement or for triviality, refunds for less than two years' qualifying service and transfers-out. If these restrictions are removed, then schemes will be able to treat former protected rights in line with other scheme benefits, making scheme administration easier, reducing costs and giving more flexibility to members. 

Action required

Trustees should review their scheme rules without delay to check whether Protected Rights Rules are hard-coded, whether any action has been taken to remove these Rules and if not consider passing a resolution before 6 April 2018 to remove them.

Contact us for further advice

Further Reading

We use necessary cookies to make our site work. We'd also like to set analytics cookies that help us make improvements by measuring how you use the site. These will be set when you accept.

For more detailed information about the cookies we use, see our Cookies page.

Manage your cookies

Our use of cookies

We use necessary cookies to make our site work. We'd also like to set analytics cookies that help us make improvements by measuring how you use the site. These will be set when you accept.

For more detailed information about the cookies we use, see our Cookies page.

Necessary cookies

(Required)

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

These cookies are required

Tracking cookies

Anonymous cookies that help us understand the performance of our website and how we can improve the website experience for our users. Some of these may be set by third parties we trust, such as Google Analytics.

They may also be used to personalise your experience on our website by remembering your preferences and settings.

Marketing cookies

These cookies are used to improve and personalise your experience with our brands. We may use these cookies to show adverts for our products, or measure the performance of our adverts.