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Protected rights in SIPPS: more choice for pension investors

DEPARTMENT FOR WORK AND PENSIONS News Release (PENS-049) issued by The Government News Network on 10 December 2007

Consultation begins today on draft regulations which will allow Self Invested Personal Pension Schemes (SIPPs) to hold protected rights.

Existing restrictions preventing SIPPs from holding protected rights are now considered unnecessary - particularly in the light of recent changes which mean SIPPs are regulated by the FSA.

Minister for Pensions Reform Mike O'Brien said: "This proposed change will give people more freedom to choose where they invest their pension savings.

"It will remove a restriction on SIPP schemes which is no longer necessary and make it easier to transfer funds between schemes"

The consultation runs until 29 February 2008.

Notes to Editors

1. Copies of the consultation document can be obtained from http://www.dwp.gov.uk/consultations/2007

2. The effect of the current legislation is that a SIPP scheme cannot obtain a contracting-out certificate, and cannot therefore hold protected rights. Protected rights are contracted out rights held in a defined contribution pension scheme.

3. The draft regulations also include a minor amendment to the detailed rules on annuities to bring DWP legislation into line with tax law.

Textphone: 020 3267 5145
Website: http://www.dwp.gov.uk

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