PSI2.3.24 - Taxation Background: CHAPTER I PART XIV ICTA 88 - Finance (No2) Act 1987, Finance Act 1989 and Finance Act 1999 Changes - Death In Service Benefits

(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)

If an employee is a member of a scheme established prior to 17 March 1987 which provides benefits for death in service only, and on or after 17 March 1987 that scheme is amended to include retirement benefits, or the employee becomes a member of another scheme of the employer or an associated employer which provides retirement benefits, that member cannot claim pre-Finance (No2) Act 1987 "continued rights", under The Occupational Pension Schemes (Transitional Provisions) Regulations 1988 or by asking the PSO to agree to entitlement to such rights (see PSI2.3.23), by virtue of membership of the death in service only scheme.

The position is, however, different so far as the Finance Act 1989 changes are concerned. If, before 1 June 1989, an employee became a member of a scheme established prior to 14 March 1989 which provides benefits for death in service only, and on or after 14 March 1989 that scheme is amended to include retirement benefits, or the employee becomes a member of another scheme of the employer or an associated employer which provides retirement benefits, that member can claim pre-Finance Act 1989 "continued rights".