Pension schemes that were subject to the pre-6 April 2006 (A-day) tax regime, and have not yet updated their rules, are reminded that the transitional provisions expire on 5 April 2011.
The Finance Act 2004 introduced a new tax regime from 6 April 2006. However, legislation allowed the status quo to continue during the “transitional period” so that schemes that wished to retain the pre-A Day limits (e.g. on benefits) did not need to take immediate action when the pre-A Day statutory provisions were repealed.
Most schemes will have already updated their rules for the new tax regime, but the transitional provisions expire on 5 April 2011 for those that have not yet taken action. Failure to take action before the end of the transitional period may have significant consequences, for example benefits may become payable without being subject to the limits a scheme currently has in place.