PSI3.1.23 - Membership of Schemes: Eligibility - Employees of Joint Venture Enterprises

(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)

[PN21.7]

Sometimes two or more unassociated companies may set up a joint venture company or partnership. Usually such a joint enterprise has a limited purpose and does not involve a take-over or merger in the usual sense. It may be, for example, that the companies wish to tender for a contract but each on its own is neither large enough nor has the financial resources to compete. They may form a separately incorporated company for the purpose or operate through a partnership. Your approach to proposals to set up pension arrangements for employees of such joint enterprises should be flexible. The membership is normally limited to ordinary employees and, in the absence of controlling directors (see PSI3.3.2-4), we need not be seriously concerned about manipulation. The usual "controlling director" restrictions must however be included (see PSI3.3.5) unless such individuals are specifically excluded from membership. The joint enterprise may participate in the scheme of any of its participants or set up its own pension arrangements. If separate pension arrangements are set up make sure that the scheme rules provide for the benefits to be aggregated with those payable under other approved schemes of the participating employer.

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