(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)
Where an AVC arrangement is set up through a supplementary
scheme instead of through the employer's main scheme there are
certain features to look out for. If the supplementary scheme is to
be approvable, the employer's contributions to it must be
sufficient to satisfy the requirements of section 590(2)(d) ICTA
1988 (see
PSI5.1.21-23). The rules need
careful examination to ensure that they satisfactorily take into
account contributions to, and benefits payable from, the employer's
other approved scheme(s). (The aggregate contributions to, and
benefits from, all approved schemes of the employer must be within
approvable limits.) The employee's normal retirement date should
usually be the same under both schemes (see PSI6.3.7) and all
benefits relating to a particular event should come into payment at
the same time. Where scheme trustees have adopted the flexible use
of AVC provisions (see
PSI25.3.1) the member may
decouple their AVC benefits and elect to receive them earlier/later
than employer funded benefits.
