What Happens to a Transition to Retirement Pension When the Member Reaches Age 65 or Retires Before Reaching Age 65?

The design of the new pension arrangements indicated that in this situation the transition to retirement pension simply transforms into an account-based pension.  This transformation is automatic and need not entail a commutation of the transition to retirement pension and a commencement of an account-based pension.

Regulations have now made the position explicit.  As soon as an unrestricted release condition occurs in respect of the member (eg reaching age 65 or retiring before age 65) the restrictions (ie on commutation and the 10% pension ceiling) which apply to transition to retirement pension cease to apply.  In effect the pension becomes an account-based pension.  However, there is no recalculation of the minimum pension amount.