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The Technical Quiz – 1 November

To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions. Answers below.

The Technical Quiz MM 480

Question 1: Joe has a pension valued at £300,000 with scheme specific protected cash of £180,000. The pension is structured as ten identical arrangements. He is looking to take some benefits as he wants to use £40,000 of his cash to pay off his mortgage. He should be aware that

A) One of the conditions of scheme specific protected cash mean that he must take all the benefits under an arrangement, so he must crystallise either two or three arrangements to provide cash of £36,000 or £54,000 respectively

B) One of the conditions of scheme specific protected cash means that he must take all the benefits under the scheme at the same time. This means that to maintain his protected cash entitlement he will need to fully crystallise his entire £300,000 pension fund

C) It is possible for Joe to phase in his protected cash benefits so long as he has attained the normal minimum pension age

D) Joe will transfer three of his arrangements to a new scheme from which he will take his desired cash

Question 2: Which one of the following statements is not correct in relation to the block transfer rules?

A) The transfer must be made as a single transaction

B) All the sums and assets representing accrued rights under the original scheme must be transferred to the new scheme

C) All of the sums and assets transferred must be applied to the same receiving scheme, although they can be spread across more than one arrangement

D) Before the transfer, the member must not have already been a member of the registered pension scheme to which the transfer was made for longer than 12 months before the date of the transfer

Question 3: Block transfers can be used as a means of

A) Preserving scheme specific protected cash only

B) Preserving special early pension ages only

C) Preserving scheme specific protected cash and special early pension ages only

D) Preserving scheme specific protected cash, special early pension ages and fixed protection only

Question 4: Edward had a protected early pension age prior to A-Day and was entitled to take his pension benefits from age 40. He ended up crystallising his pension rights on attaining age 45. He will suffer a reduction in the lifetime allowance of

A) 10%

B) 15%

C) 20%

D) 25%

Question 5: Rupert was a member of the Armed Forces Pension Scheme (AFPS) and has a protected early pension age. In addition he has a FSAVC to which he contributed whilst in the military and also a SIPP to which he had made contributions from royalties he received as a writer. He is looking to take his benefits prior to age 55 he should be aware that

A) He can only crystallise his AFPS benefits prior to age 55

B) He can only crystallise his AFPS and his FSAVC benefits prior to age 55

C) He can crystallise his AFPS prior to age 55. He may also crystallise his FSAVC benefits before age 55 so long as no contributions were made to them since A-Day

D) As he has a protected pension age, he can crystallise all his pension rights from that early age.

Questions supplied by Technical Connection

_________

Answers
1 B
2 C
3 C
4 D
5 A

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