Term Allocated Pensions (TAP) provide your clients with a regular income stream over a fixed term. The term is set when you start your TAP.
If your client has a TAP expiring this financial year, there may be some things you need to do before it ends, which we’ve outlined below.
What you need to do if your client has a TAP that's ending
If your client’s holdings are invested, you’ll need to sell down their assets to a cash account to fund your client’s future pension payments.
Please note, if a sell down doesn’t happen before the account closure date, we may need to sell down your client’s holdings for you.
As part of the sell down process, we may also need to temporarily remove you as an adviser from your client’s account. If we need to remove you from their account, you can contact us after the account is closed to reinstate your access.
How are pension payments calculated?
To ensure the account balance is fully paid to your client by the term end date, or in June of the following year, all pension payments will be calculated using the account balance on 1 July.
Any account balance movements due to investment performance and or fees, may mean that your client’s final pension payment could be either more or less than the preceding pension payment.