What are protected benefits?
If a member had pension rights valued at over £1.5m at 5 April 2006 then they may have applied for protection. Since then there have been other forms of protection in 2012, 2014 and 2016 that members could apply for.
Consequently some members do not have the standard LTA and will have a certificate from HMRC giving them an individual LTA amount that is higher than the standard LTA.
The standard LTA is currently (2017/18) £1073,100. If the value of the LSDB is greater than the value of the member’s protection then the recipient needs to notify HMRC so that the protection can be increased. If they do not do this and subsequently die in service, there may be a liability to the LTA charge which is 55% paid on the amount that exceeds the LTA.
It is vital to check if protection exists, and in some cases, it may need to be recalculated on death.
