(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)
An employee may be a member of his/her employer's
occupational pension scheme while at the same time and for the same
employment contributing to a personal pension scheme, if this
paragraph or
PSI3.1.25 or
PSI3.1.26 apply If contributions have
been made to both types of scheme in other circumstances, the
personal pension contributions paid in that period should be
refunded (see
PSI22.3.24).
If the employer's occupational pension scheme is not
contracted-out, the employee may join a personal pension scheme
purely to contract out of the State Second Pension (S2P) (before 6
April 2002, SERPs). The only contributions which may be accepted by
the scheme administrator are the "minimum contributions" which are
the rebate of National Insurance contributions and associated tax
relief which are paid to the scheme by the Inland Revenue National
Insurance Contributions Office. Such personal pension arrangements
are sometimes known as "rebate only" personal pensions.
Benefits from "rebate only" personal pension arrangements are
not aggregable for the purposes of calculating the employer's
occupational pension scheme limits; nor are they treated as
retained benefits in any subsequent employer's occupational pension
scheme.
