Tax free pension lumpsum waiver form

davidgalaxys3

Registered User
Messages
5
Hi Folks,
I have heard that for redundancy calculation using SCSB formula and tax saving, pension waiver form can be signed for not taking tax free lumpsum in the retirement.
I have few questions-
a) Who provides pension waiver form? Is it given by employer or pension provider?
b) What is the exact process to waive off the right for getting pension tax free lumpsum in the future? Thanks
 

ginslia

Registered User
Messages
76
First post in the thread entitled “redundancy-taxation-options” shows the impact of the different redundancy /tax free calculations. (Sorry can’t post link)

A) the employer (with tax advisor) will prepare the calculation and any forms to be completed, including the actuarial/present value of any tax free lump sum.
b) read the form carefully! Pick an option, sign and return to your employer (keep a copy for your own records)
Waiving means you get a larger tax free amount now, but you can’t get a tax free lump sum later from any deferred pension from THIS employment only (past and future occupational pension fund lump sums are NOT affected). Not waiving now means you will pay tax on the calculated amount (which is much less that the actual value of the lump sum when you eventually retire).

if you have long service, good salary, have a DB pension, are in good health, have a long way to go before retirement- most likely you are better off Not waiving. However if you have a lot of debt or expenses with no emergency fund, maybe more cash now is what you need, but best to work out the numbers for your circumstances, to make an informed decision.
 
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