PSI4.3.6 - Maximum Contributions: AVCs

(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)

[PN4.2]

The 15% limit on employee contributions is subject to the overriding condition that the total of the employee's and the employer's contributions must not be more than is needed to fund for the benefits payable under the scheme(s) at NRD. This is not normally a problem where only regular contributions are paid and you can accept that the amount paid by the employee is no more than is necessary. Voluntary contributions are another matter, especially where employees wish to take full advantage of the facility. The contributions must be directly related to the amount of additional benefits to be provided even if this means an employee contribution level below 15%. The further benefits should be approvable both in nature and amount.

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