What constitutes a crystallisation event?

• A. The retirement date is reached.
• B. Making a new contribution to the plan.
• C. Using part of the pension fund to provide income or a lump sum, triggering potential tax consequences.
• D. Changing investment strategy within the fund.

Answer: (C)

Crystallisation happens when part of a pension fund is unlocked to provide benefits and, with that access, tax rules apply. It occurs when you start taking money from the fund—either as a regular pension income or as a lump sum. Once crystallised, the portion of the fund accessed is taxed under the relevant rules, and any tax-free cash and remainder may be treated differently for tax purposes. That’s why using part of the pension fund to provide income or a lump sum—and thereby triggering potential tax consequences—is the correct choice. Reaching a set retirement date without actually taking benefits doesn’t automatically crystallise the fund, and making a new contribution or changing investment strategy inside the fund does not in itself crystallise benefits.