Graham is a self-employed doctor. What is the latest age by which he must draw on his PRSA?

Prepare for the Qualified Financial Adviser (QFA) Pensions Exam 2. Test your knowledge with flashcards and multiple choice questions. Review detailed explanations for each question and get ready to succeed!

Multiple Choice

Graham is a self-employed doctor. What is the latest age by which he must draw on his PRSA?

Explanation:
The key rule here is that a PRSA has a latest date by which benefits must start being drawn: by age 75. This applies regardless of the person’s employment status, so Graham, even as a self-employed doctor, must begin drawing from his PRSA by the time he reaches 75. The rationale is to crystallise the pension funds within a reasonable timeframe and prevent funds from remaining dormant indefinitely. If drawing hasn’t started by 75, the plan typically moves toward crystallisation with options like transferring to an ARF or purchasing an annuity, depending on the plan. You can start drawing earlier if your plan allows, but waiting beyond 75 isn’t permitted.

The key rule here is that a PRSA has a latest date by which benefits must start being drawn: by age 75. This applies regardless of the person’s employment status, so Graham, even as a self-employed doctor, must begin drawing from his PRSA by the time he reaches 75. The rationale is to crystallise the pension funds within a reasonable timeframe and prevent funds from remaining dormant indefinitely. If drawing hasn’t started by 75, the plan typically moves toward crystallisation with options like transferring to an ARF or purchasing an annuity, depending on the plan. You can start drawing earlier if your plan allows, but waiting beyond 75 isn’t permitted.

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