The age 75 rule

Subject to the lump sum, the balance of the fund must be secured by age 75 by taking a pension eg an annuity guaranteed by an insurance company or a pension from an employer. There will also be the facility to retain some control of the fund by taking 'alternatively secured income' (ASI).

Under ASI

• The annual pension income must be between minimum (expected to be £1 or nil) and maximum limits.
• The maximum will be 70% of the annual amount which would be payable if the fund were used to buy a flat-rate single-life annuity on the open market for a person aged 75.
• On the eventual death of the member, after age 75, no lump sum is payable. However the remaining fund can be used to provide a dependants’ pension. If there are no dependants the fund can be reallocated between any remaining scheme members (or go the member’s nominated charity).