(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
A simplified defined contribution scheme (SDCS) provides
benefits limited only by the rate of contributions to be paid. The
sole purpose of such a scheme is the provision on a money purchase
basis of relevant benefits for employees. It is not permissible to
guarantee benefits at a level determined by reference to final
salary. An SDCS can also provide relevant benefits to the ex-spouse
of a scheme member where the member’s benefits in the scheme
are subject to a pension sharing order. The benefits for the
ex-spouse must be on the same money purchase basis as for the
scheme member.
The IRSPSS has ceased to consider new applications for tax
approval of sdcss with effect from 1 April 2001. Existing approved
sdcss are not affected. Applications for employers to participate
in a SDCS approved before 1 April 2001 are to be considered in the
normal way (see Part 21).
