PSI2.3.23 - Taxation Background: CHAPTER I PART XIV ICTA 88 - Finance (No2) Act, Finance Act 1989 and Finance Act 1999 Changes - Continued Rights

(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)

Transitional provisions apply to members who, through no fault of their own (for example, their employer is taken over by another) find themselves joining schemes of their employer or certain associated employers on or after 17 March 1987 or, on or after 14 March 1989, or on or after 1 June 1989 and would otherwise be subject to the Finance (No2) Act 1987 and Finance Act 1989 changes. Where the circumstances justify a view that there is essentially no change of employer and there is effective continuity of scheme membership, such members may be permitted to retain their former basis of benefit provision and be given "continued rights" in the new scheme. For employees joining schemes on or after 17 March 1987, pre-Finance (No2) Act 1987 continued rights entitlements are conferred under the Occupational Pension Schemes (Transitional Provisions) Regulations 1988 [SI 1988 No 1436] where the scheme was approved prior to 23 July 1987 by disapplying the statutory override in Schedule 23 ICTA 1988. Where the scheme was approved on or after 23 July 1987 such an employee's entitlement to pre-Finance (No 2) Act 1987 continued rights must be agreed with the PSO and we will consider the particular circumstances in the light of the 1988 Regulations.

For employees joining scheme set up on or after 14 March 1989 or joining pre-14 March 1989 schemes on or after 1 June 1989, pre-Finance Act 1989 continued rights entitlements are conferred under the Retirement Benefits Schemes (Continuation of Rights of Members of Approved Schemes) Regulations 1990 [SI 1990 No 2101] where the scheme was approved prior to 27 July 1989 by disapplying the statutory override in Part II, Schedule 6 Finance Act 1989. Where the scheme was approved on or after 27 July 1989 such an employee's entitlement to pre- Finance Act 1989 continued rights must be agreed with the PSO and we will consider the particular circumstances in the light of the 1990 Regulations.