Commuting complying DB pensions
A complying defined benefit pension is a non-commutable income stream. Generally, a member cannot commute a non-commutable income stream and pay out the benefits as a lump sum. There are limited instances when a member can commute a complying defined benefit pension and one such occasion is when the proceeds are used to commence another complying income stream.
There are only two types of complying income streams now available to members wishing to commute their complying defined benefit pensions. The two complying income streams are:
- Complying market linked pensions (Term allocated pensions (TAP)
- Retail complying annuities
We understand that Challenger has closed their Complying Annuity product. We are not aware of any other alternatives in the market.
Case study: Commuting a complying lifetime pension
Case study: Commuting a complying life-expectancy pension
Market linked pensions
This section provides more information on market linked pensions for those clients who wish to commute their complying pension into a market linked pension.