Maximum PCLS Requested at SIPP New Business Stage

Maximum PCLS Requested at SIPP New Business Stage

When a client requests the maximum PCLS (25%) as part of their SIPP new business application, the process varies depending on whether the transfer involves a single policy or multiple policies. This guide outlines how we manage expectations, calculate PCLS, and handle adviser preferences.

Single Transfer Scenario

Example: Client is transferring in one pension policy and requesting maximum PCLS.

Process:

1. PCLS Expectation is created based on 25% of the anticipated gross transfer value.
2. On receipt of funds, Buying Power retains the monetary amount based on the PCLS expectation.
3. PCLS is calculated using the gross transfer value received.
4. If the actual transfer value exceeds the anticipated amount, a sell down of assets may be required to release the additional PCLS.

Multiple Transfers Scenario

Example: Client is transferring in four pension policies and requesting maximum PCLS.

Process:

1. PCLS Expectation is based on 25% of the total anticipated value of all transfers.
2. On receipt of funds, Buying Power retains the monetary amount based on the PCLS expectation.
3. The maximum PCLS is calculated only once all transfers have been received and accepted.
4. Since the transfers are expected to arrive over a period of weeks or months, it is not possible to calculate the maximum PCLS based on each individual gross transfer amount. It will be calculated using the value of the SIPP on the date on which the final transfer is received.
5. Our system requires a single Benefit Crystallisation Event (BCE) date, preventing incremental PCLS processing.

Adviser Preferences

• Some advisers prefer to submit individual maximum PCLS requests as each transfer is received and accepted.
• Others opt to request PCLS at new business stage, which is calculated and paid once all transfers complete.
• Advisers may also choose to add a ringfence amount to account for potential variations in transfer values.