The DWP has issued its response to the December 2007 consultation on draft regulations which will allow SIPPs to hold protected rights.
At present, individuals cannot transfer protected rights into a SIPP on the grounds that rights intended to replace State benefits should not be subject to the risks that can arise from selfinvestment. However, those restrictions are now considered unnecessary following changes which brought all personal pensions, including SIPPs, under FSA regulation from April 2007.
The Personal and Occupational Pension Schemes (Appropriate Schemes) (Protected Rights) (Amendment) Regulations 2008 will be laid before Parliament shortly and are intended to come into force on 1 October 2008.
Schemes wishing to hold protected rights will need to hold a valid contracting-out certificate.
Applications for a contracting out certificate can be made prior to the legislation coming into force. The application should be made to HMRC using form APSS101 requesting an effective date of contracting-out of 1 October 2008.