I have to say I like a good jigsaw puzzle but there is nothing more frustrating when pieces are missing. George Osborne's announcement on the 29 September on changes to defined contributions death benefits turned out to be just like that.

It started as I drove into work that morning. Whilst listening to the news George pre-announced his announcement to be made at the Conservative Party Conference later that day. I picked up on 'abolition of 55% tax charge' and how a 'beneficiary can access the deceased member's pension fund tax free at any time'. Surely not! I know that AMPS had been pushing for pension funds to be transferable to the next generation's pensions, but this appeared to be a far more generous relaxation of the rules than we could have ever have imagined. I wondered if my confusion as regards the content of his ramblings was down to concentrating on the white van cutting in and out of the traffic ahead. Never mind all would be clearer once I got to the office and had a chance to look at the detail.
Disappointingly, there was nothing on the Treasury website and the press had wide but conflicting coverage. It was mid morning before the Treasury did issue a news story entitled 'Chancellor abolishes 55% tax on pension funds at death'. It was scant to say the least but did give us the bones of what was intended.

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So if the member died before age 75, even if their fund was crystallised, they can pass their remaining pension fund to a nominated beneficiary who can then take the money they withdraw either as a single lump sum or access it through drawdown tax free . For members who die at or after the age of 75 the nominated beneficiary can take a lump sum taxed at 45% in 2015/16 and potentially subject to the beneficiary's marginal rate of tax thereafter, but this will be subject to consultation. If the beneficiary opts for drawdown then withdrawals will be taxed at their marginal rate of income tax.

Some sources reported that the changes came in with immediate effect. Further clarification came out later in the day that a beneficiary could delay taking benefit until 6 April 2015 in order to benefit from the new regime.
Now with five months to go before the changes come into play, and even with draft legislation available, there are a lot of unanswered questions. Such as, can there be more than one beneficiary? Can a beneficiary be a charity or a trust? Are the new rules applicable to someone in receipt of a dependant's drawdown pension? Not a great place for pension providers to be and it will be a very busy time once sight of the legislation becomes available.
What happened to the nice logical sequence of budget announcement followed by draft legislation, then consultation and then final legislation? Also accepting that a reasonable period of time for the implementation of the changes will be required trying to make short term political gain, or in this case deflecting bad news from the day before Osborne's announcement, simply does not work when dealing with issues of this complexity.
Let's hope those vital missing pieces of information come to hand soon and we can then see the full picture.

Neil MacGillivray is chairman of the Association of Member-directed Pension Schemes