12 June 2007
The Department for Work and Pensions (DWP) plans to remove the
investment restriction for protected rights funds. Current
legislation does not allow protected rights funds to be
self-invested under a Self Invested Personal Pension (SIPP).
Although they can from part of a SIPP, they must be ring fenced
in an insurance contract.
DWP proposals will allow a greater investment choice, thus
allowing protected rights to be self-invested.
DWP are also proposing to withdraw the unisex annuity rate
requirement for protected rights benefits. This means that men will
benefit from higher annuity rates as they do not tend to live as
long as women. Unisex annuity rates tend to disadvantage men.
However, DWP will not relax the requirement for a 50% spouse's
pension where the individual is married at the time they take their
protected rights fund.
