Comparison of pension death benefit options
Question - Use Your Note Taker To Jot Down Ideas / Calculations
Which of the following payments will not trigger the money purchase annual allowance?
You should select all the correct answers.
a) An UFPLS of £20,000.
b) Three small pots payments totalling £14,000.
c) A PCLS plus a lifetime annuity that will pay a level income for life.
d) A PCLS plus a scheme pension from a defined benefit scheme.
A) No: An UFPLS would trigger the MPAA.
B) Yes: Small pots payments do not trigger the MPAA.
C) Yes: PCLS does not trigger the MPAA and the annuity is a level payment so is a conventional annuity not a flexible annuity and so does not trigger the MPAA.
D) Yes: Funds come from a DB scheme and so do not trigger the MPAA.