(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)
[Pn4.10]
Employee contributions will usually cease at normal
retirement date or earlier if the employee leaves pensionable
service. They may, however, start or continue after NRD if the
employee remains in service after that date whether or not any
benefits have been paid in advance of actual retirement, e.g.
Where AVC benefits are paid before employer funded benefits in
accordance with
PSI25.3.1.
In this event, they can be used to augment benefits within
maximum approvable limits or reduced maximum limit in the case of a
member subject to a pension sharing on divorce order (see
PSI4.3.18). Where the employee has
taken benefits either at NRD or in advance of actual retirement,
maximum approvable benefits are calculated as at the date on which
benefits are first paid (except where AVC benefits are paid before
employer funded benefits – see
PSI25.3.9). Where the
employee takes no benefits in advance of actual retirement, the
maximum approvable benefits are calculated as at the date of such
retirement and may include additional benefits permissible on late
retirement (other than actuarial increases in pension or interest
on lump sums) as set out in
PSI9.2.1 et seq. The payment
of contributions after NRD has the effect that the employee is
regarded as remaining in pensionable service and so it is not
permissible for such service to be pensioned under a personal
pension scheme. Where the employer's contributions cease at or
after NRD but employee contributions continue thereafter, it will
not prejudice our view on the adequacy of the employer's
contributions (see
PSI5.1.17).
