(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)
It was a condition of approval that the membership of a
scheme had to be limited to employees of a participating employer
or the widow, widower or dependants of such an employee. In 2000
the law changed to allow the pension rights of an employee to be
shared with the ex-spouse of the employee as part of a financial
settlement to their divorce. Under the new pension sharing on
divorce provisions, some or all of the employee’s benefit
rights can be passed over to the ex- spouse so that the ex-spouse
can receive benefits in his or her own name. Because of the change
in law a scheme’s membership eligibility rule can be extended
to include the ex-spouse of an employee where the scheme receives a
pension sharing order in relation to the employee. Where there is
such a pension sharing on divorce order, the eligibility rule can
also include the widow, widower or dependants of the ex-spouse.
Note references to employee above also includes former
employees (see
PSI3.1.3).
