With the introduction of the Planned Withdrawals screen, we both enhanced and simplified pension income options. In doing so, GAD related drawdown options were removed to streamline things in the software. However, we soon discovered that some firms still use GAD assessments as a method of providing pension income over a lifetime.
GAD has been restored as a withdrawal limit for drawdown pensions. Scheduled withdrawals and those taken as needed from a drawdown pension can limited to a percentage of GAD. You will find this setting on the Pensions > Drawdown Pension screen’s Withdrawal Limits panel.
As is the case with all withdrawal limits:
1. GAD limits, when set, apply not only to as needed withdrawals from a drawdown pension but also to planned withdrawals scheduled on the new Planned Withdrawals screen.
2. GAD limits can be changed or removed in the future, if necessary, using the Step Up / Step Down panel.
GAD Table Look-ups and the 15-Year Gilt Rate Preference
GAD table look-ups are performed using the 15-year gilt rate, an assumption that we encourage you to review and possibly set in the software's Plan Preferences > Default Inflation / Growth Rates.
This setting is really a holdover from the days prior to pension flexi-drawdown. However, if you do choose to limit a pension drawdown based on a percentage of GAD, and some clients may still be on such a schedule, then the 15-year gilt rate setting, taken from Plan Preferences, is still used for GAD table look-ups.