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ColleCtive RetiRement ACCountFlexible Drawdown Explanatory Guide and Declaration

WhAt is Flexible DRAWDoWn?Flexible Drawdown is a type of income withdrawal where you can take pension income direct from your pension fund without having to purchase an annuity. Ordinarily there are limits on the maximum income you can take under income withdrawal (known as Capped Drawdown). However, under Flexible Drawdown there is no limit on the amount of income you can take in any year. You can tailor your drawdown pension to suit your personal requirements whether taking regular amounts at a set frequency or ad hoc income when required. There is even the option to draw the entire fund in one go.

All income withdrawal payments are subject to income tax under PAYE at your appropriate marginal rate.

To be able to use the Flexible Drawdown facility you must meet certain requirements.

WhAt ARe the Flexible DRAWDoWn RequiRements?You must meet the following conditions:• You must be in receipt of ‘relevant pension income’ of at least £12,000 per year; and actually receive at least £12,000 relevant pension income

in the tax year that you enter Flexible Drawdown.• You must not have made pension contributions to a money purchase arrangement (for example a personal pension) in the tax year that you go

into Flexible Drawdown. This includes contributions made on your behalf by an employer or a third party.• You must have stopped building up benefits under a defined benefit or cash balance arrangement*.

To enter Flexible Drawdown you must make a valid Flexible Drawdown declaration and have that declaration accepted by the Scheme Administrator, Old Mutual Wealth Life & Pensions Limited.

note: Once you have entered Flexible Drawdown you will incur tax charges if you build up any subsequent pension benefits under any registered pension scheme.

WhAt type oF pension inCome Counts As ‘RelevAnt pension inCome’?Relevant pension income includes:state pensions - basic state pensions and state second pensions; state graduated pension; industrial death benefit; widowed mother’s allowance; widowed parent’s allowance; and state widow’s pension.scheme pensions – this is a type of pension that is normally provided by Final Salary (defined benefit) Schemes. Not all Scheme Pensions count as relevant pension income, see note A below to see what counts.lifetime Annuities – pension income purchased from an insurance company. Not all Lifetime Annuities count as relevant pension income, see note B below to see what counts.overseas pensions that would be one of the types of pension above if paid by a UK registered pension scheme.pension income provided by the Financial Assistance scheme (FAs). The FAS provides compensation to members of pension schemes that ended and did not have enough money to pay member’s benefits.

Please note that Income Drawdown and Fixed Term annuities cannot count toward the £12,000 minimum income requirement.

note A:A Scheme Pension from a defined benefit arrangement will count as relevant income if the Scheme it is paid by has 20 or more people who are in receipt of a Pension. A Scheme Pension from a Money Purchase Arrangement will count as relevant income if the Scheme it is paid by has 20 or more people who are in receipt of a Scheme Pension. If there are less than 20 people receiving a Pension as previously described, it will not count as relevant income unless either of the following applies:• There were 20 or more members with defined benefits entitlements in the Scheme before 6 April 2011 and you were one of those members; or• The Scheme Pension you are receiving is met by an annuity contract provided by an insurance company.

note b:To count as relevant income a lifetime annuity must be either level or increase by a fixed rate, for example 3% a year, or one linked to RPI. For all other lifetime annuities it is only the amount guaranteed to be paid each year that can be included for relevant income purposes, regardless of any increase or decrease that may apply to the annuity year on year.

The Scheme providing your pension income will be able to confirm which of the above circumstances applies to you.

Does olD mutuAl WeAlth hAve Any ADDitionAl CRiteRiA thAt neeD to be met?• To be able to access the Flexible Drawdown facility, you must either have total CRA funds of at least £37,500 on the date Old Mutual Wealth

accepts your Flexible Drawdown declaration (for this purpose, 75% of any uncrystallised funds count toward the threshold and any outstanding phased initial charge will be ignored); or

• For funds of any lower amount have held those funds within an Old Mutual Wealth pension policy for three years prior to completing the Flexible Drawdown declaration

• Although the legislation allows overseas income to be included as ‘Relevant pension income’ Old Mutual Wealth will not accept a Flexible Drawdown declaration that depends upon overseas pension income to meet the £12,000 minimum pension income requirement.

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hoW Do i enteR Flexible DRAWDoWn unDeR the CRA?We will need you to complete a Flexible Drawdown declaration in all cases.

If you wish to convert part of or all of your CRA that is currently uncrystallised to Flexible Drawdown we will need you to complete a Benefit Crystallisation Request for Income Drawdown form telling us how much Pension Commencement Lump Sum and income you wish to take. Your funds will be moved into capped drawdown initially and once we receive and accept the Flexible Drawdown declaration they will move into Flexible Drawdown.

If you wish to apply the Flexible Drawdown facility to an existing crystallised or part crystallised CRA we will only need a Flexible Drawdown Declaration. If you wish to change the amount of income you wish to take from your income withdrawal fund you will need to complete an Income Withdrawal Amendment form.

The Flexible Drawdown declaration form can be found in the following pages.

The Benefit Crystallisation Request for Income Drawdown form is available through your financial adviser.

WhAt hAppens iF it is subsequently FounD thAt the Flexible DRAWDoWn ConDitions hAve not been met?This will depend on what payments have been made from the drawdown fund. If the conditions were not met, the income withdrawal payments will be subject to maximum annual income limits that apply to Capped Drawdown.

If the income withdrawal payments made exceed the maximum amount allowed under Capped Drawdown, the amount of the excess income withdrawal payment will be subject to unauthorised payment tax charges payable to HM Revenue & Customs. The tax charge can be up to 70% of the excess income withdrawal payment (net of any income tax already applied to the excess withdrawal payment).

* A cash balance arrangement provides a lump sum that is added to your pension pot for each year of service and sometimes a promise that your fund value will increase each year by at least a set rate. When you draw a pension, the benefit payable will depend on the fund value at that time. For example you are promised that £5,000 will be added to your pension pot for every year with your employer. So if you are with your employer for 20 years you can expect a pension pot of £100,000. But you don’t know how much pension £100,000 will buy as that will depend on annuity rates when you start to draw a pension.

www.oldmutualwealth.co.ukCalls may be monitored and recorded for training purposes and to avoid misunderstandings.Old Mutual Wealth is the trading name of Old Mutual Wealth Limited which provides an Individual Savings Account (ISA) and Collective Investment Account (CIA) and Old Mutual Wealth Life & Pensions Limited which provides a Collective Retirement Account (CRA) and Collective Investment Bond (CIB). Old Mutual Wealth Limited and Old Mutual Wealth Life & Pensions Limited are registered in England and Wales under numbers 1680071 and 4163431 respectively. Registered Office at Old Mutual House, Portland Terrace, Southampton SO14 7EJ, United Kingdom. Old Mutual Wealth Limited is authorised and regulated by the Financial Conduct Authority. Old Mutual Wealth Life & Pensions Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Their Financial Services register numbers are 165359 and 207977 respectively. VAT number 386 1301 59.When printed by Old Mutual this item is produced on a mixed grade material, which uses a combination of recycled wood or paper fibre from controlled sources and virgin fibre sourced from well-managed, sustainable forests.

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Please complete this form if you wish to enter flexible drawdown under the Collective Retirement Account (CRA).

To:Old Mutual Wealth Life & Pensions Limited (the administrator) of the Old Mutual Wealth Personal Pension Scheme (the scheme).

I, the undersigned being a member of the scheme hereby request the administrator to accept this declaration and apply the Flexible Drawdown rules to the crystallised funds held within my CRA(s) listed below.

Address

Member’s name

National Insurance number

Postcode

Enter CRA number(s) to be covered by the declaration

Member’s details

I declare that:

• IamawareofOldMutualWealth’sminimuminvestmentthresholdthatisrequiredtoaccessFlexibleDrawdown.

• AtthedateofsigningthisdeclarationIaminreceiptofrelevantpensionincomefromthesourcesdetailedonthepagesattachedthatwillinthistax year total at least £12,000.

• Eachsourceofincomedetailedoverleafmeetstherequirementstobeincludedasrelevantpensionincome(seetheattachedexplanatoryguideforfurther details).

• Iunderstandthattheadministratorisundernoobligationtoacceptthisdeclaration.

• Nocontributionshavebeenorwillbepaidbymeoronmybehalftoanyregisteredpensionschemeinthetaxyearthisdeclaration is made.

• AtthedateofmakingthisdeclarationIhavestoppedbuildingupbenefitsunderanydefinedbenefitsandcashbalancearrangementsunderwhichI am entitled to benefits.

• Iconfirmthatthecontentsofthisdeclarationarecorrectandcompletetothebestofmyknowledgeandbelief.

• IunderstandthatanydeliberateincorrectinformationonthisformcouldleavemeliabletopenaltiesimposedbyHMRevenue&Customs(HMRC).

• IfpaymentsmadeunderFlexibleDrawdownarelaterfoundtobeunauthorisedpayments,IconsenttoOldMutualWealthpayinganyschemesanction tax charge to HMRC from my remaining pension funds.

• WhereIhavepreviouslymadeadeclarationconfirmingthatImeettheFlexibleDrawdownconditions,thatthedeclarationwasacceptedbytherelevant Scheme Administrator.

SignedDate (dd/mm/yyyy)

Print name

Flexible DRAWDoWn DeClARAtion

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RelevAnt pension inCome DetAilsYour financial adviser and/or the person or organisation paying the pension income will be able to provide the information required below.Please complete one sheet in respect of each source of income to be included as relevant pension income.

Address

Amount of income payable this tax year

Postcode

Name of person/ organisation providing income

*State pensions are paid by The Pension Service. Their address is your local office that makes your pension payment.

£

£

(Complete section 3)1. Lifetime Annuity

2. Scheme Pension

(Complete section 1)


3. Social Security Pension

4. Financial Assistance Scheme

If no

Remains level Increases by a fixed rate of eg 3% Varies by reference to RPI

State Pension Industrial Death Benefit

State Widow’s Pension

Widowed Mother’s Allowance

oR

Other factors impact the level of annuity. Please confirm the minimum annuity guaranteed to be paid each year over the full term of the annuity: pa

Does the scheme paying the scheme pension have 20 or more people in receipt of a scheme pension?Yes No

If no

Is the Scheme Pension a defined benefit arrangement where 20 or more people are entitled to pensions from that scheme? Yes No

Or

Are the scheme pension payments met by an annuity contract provided by an insurance company that satisfies the requirements of relevant pension income set out in The Registered Pension Schemes (Relevant Income) Regulations 2011 SI 2011/1783?

Yes No

Is this a defined benefit pension scheme which had 20 or more members being provided with defined benefit entitlements in it before 6 April 2011 and you were one of them? Yes No

Widowed Parent’s Allowance


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seCtion 1 – liFetime Annuity DetAils

seCtion 2 – sCheme pension DetAils

seCtion 3 – soCiAl seCuRity pension DetAils

Each year the annuity

Please tick the type of Social Security Pension (ü)

RelevAnt inCome souRCe 1

type oF pension inCome

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Address


Postcode



£

£


2. Scheme Pension





If no





oR



If no


Or


Yes No




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Address


Postcode



£

£


2. Scheme Pension





If no





oR



If no


Or


Yes No




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ColleCtive RetiRement ACCount - Old Mutual Wealth · ColleCtive RetiRement ACCount ... personal requirements whether taking regular amounts at a set frequency or ad hoc income when