Changes to pension payment provisions

The Government released draft regulations last week to amend the existing pension payment provisions concerning market-linked and allocated pensions (and life expectancy pensions) which:

Draft regulations to allow more flexibility with various pensions

  • extend the maximum term of the market linked pension (and life expectancy pensions) so that payments can continue until the recipient reaches age 100
  • allow annual payments of market-linked pensions to vary plus or minus ten percent of the amounts calculated under current payment rules
  • update allocated pension drawdown factors in line with up to date life expectancies.

The draft regulations are open for comment until 16 November. Once these draft regulations are finalised it is anticipated that they will come into effect on 1 January 2006 and the Cleardocs Deed will be updated accordingly at that time.