What are protected rights? Protected rights are benefits built up as a result of contracting out of the State Second Pension (previously the State Earnings Related Pension Scheme) and which are held in a money purchase pension scheme. Historically there have been a number of restrictions that applied to protected rights but the majority of these have now disappeared. The main restriction that still applies is that, if you are married or in a civil partnership and choose to purchase an annuity from your protected rights, the annuity purchased must provide for a 50% dependant's pension on your death. This is not a requirement for non-protected rights. The Government is planning to abolish protected rights from 2012. From that point all protected rights restrictions will disappear.
Can I transfer protected rights into Sippdeal? Yes, Sippdeal will accept transfers of protected rights.
How do I transfer my protected rights funds into a Sippdeal SIPP? Existing Sippdeal Clients - If you are an existing client all you will need to do is either: Contact your existing provider and request to transfer your protected rights or complete our Transfer Form (you will need to send this form to your existing provider). New Clients - You will need to complete an Application Form (either online or pdf) and a Transfer Form.
How do I take benefits from my protected rights fund? You must complete a Benefit Form to tell us how much of your SIPP is to be used to provide benefits and how you want the benefits to be paid. If benefits have already commenced under you SIPP, taking further benefits from your protected rights funds may lead to a review of your maximum pension. If your SIPP has fallen in value since you commenced benefits, the review could lead to a reduction in the amount of income that you can withdraw from your SIPP.
Can I setup a protected rights only SIPP? Yes.
Can the SIPP be used to contract out of the State Second Pension? No, Sippdeal can only accept a transfer of existing protected rights funds. The SIPP cannot accept "minimum contributions" from HM Revenue & Customs to enable you to contract out of the State Second Pension on an ongoing basis.
Where can I get more information about protected rights? You can get more information from The Pension Service (part of the Department for Work and Pensions) www.thepensionservice.gov.uk.
What if I'm unsure about transferring my existing pension funds? If you are in any way uncertain about the merits of completing a transfer you should seek advice from a suitably qualified financial adviser.
What if I'm considering transferring from a final salary scheme? We will not accept transfers from final salary pension schemes unless you have received advice on the transfer from a suitably qualified financial adviser. Before making a final salary transfer you must confirm to us that you have received such advice.
What greater flexibility do I have with protected rights in a SIPP compared to a personal pension? Comparison of the Personal Pension v Sippdeal e-sipp
The table below compares the Sippdeal e-sipp to a Personal Pension and illustrates the range of investment options available.