Pension Case Studies

Problem

In December 2006 Bill and his twin brother Arthur were five years from their normal retirement date and having worked for the same companies over the years both had a number of the same deferred (paid up) occupational style pensions. They were currently running their own successful partnership together and were unsure whether they would officially retire in five years, so wished to build as much flexibility as possible into their pension planning while, at the same time, maximising control of their benefits. They were also keen to create as much Tax Free Cash as possible. They were referred to us by their accountant.

Solution

After assessing their situation and actuarially calculating their deferred benefits, we advised that their Tax Free Cash entitlement far exceeded the limits that were imposed post 6 April 2006. Further, if the benefits were left within the deferred environment and then altered post 6 April 2006, their Tax Free Cash entitlement would default to the new model and would be substantially reduced. By re-constructing their deferred schemes, we have now protected their deferred, higher, Tax Free Cash entitlement and, at the same time, created for them a much more flexible and robust retirement portfolio with the control they sought.

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