Unsecured pension fund meaning

An unsecured pension fund is the pot of money or other assets in a money purchase (defined contribution) pension that has been designated to pay a member income without buying an annuity (income drawdown). In the UK (England & Wales, Scotland and Northern Ireland) this was a term used in pensions tax legislation (notably the Finance Act 2004 and associated HMRC rules) for funds designated to provide an unsecured pension before age 75; at or after age 75 the fund was treated as an alternatively secured pension fund. From 6 April 2011 the unsecured/alternatively secured pension regimes were replaced by capped drawdown, and from April 2015 by flexi-access drawdown. The expression persists in scheme rules, legacy documentation and disputes concerning historic tax years. Key features: the fund (sums or assets) remains invested; the member bears investment and longevity risk; withdrawals were subject to HMRC limits and specific death-benefit tax rules applicable at the time. For current practice, references to an unsecured pension fund in older documents are commonly read as a drawdown designation. Ireland: unsecured pension fund is not a defined statutory term. Practitioners use Approved Retirement Fund (ARF) or vested PRSA terminology under the Taxes Consolidation Act for similar drawdown arrangements.