PSI4.3.11 - Maximum Contributions: Supplementary Schemes - Rules

(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)

The rules of some supplementary schemes do not require the employee to specify, at the time he or she starts paying AVCs, the type of benefits for which they are intended. They often leave this decision to the employee when he or she is close to retirement. The question may therefore arise whether the scheme rules can dispense with detailed provisions about the types of benefit available and the circumstances of their payment. The answer is "no". Certain aspects such as the amounts of contribution and the types of benefit available must be included in the announcement but this is secondary to the rules. The supplementary scheme rules must therefore set out the range of benefits available, the employee's options and the circumstances in which the benefits are payable. They need not however specify the amount of benefits payable if there is a satisfactory link with the corresponding benefits in the company's main scheme. This ensures that benefits from the supplementary scheme will be aggregated for Revenue limits purposes. (See also PSI4.3.14to 4.3.16.)

Contact: | Date issued: | Next review: