PSI4.3.7 - 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)

Employees intending to retire early may be permitted, if the scheme rules allow, to pay AVCs (subject to the restriction in PSI4.3.1) to fund the extra costs of early retirement benefits. For employees subject to Finance Act 1989 provisions this will be on the basis of N/30ths of final remuneration (subject to the permitted maximum) for total benefits and the greater of 3N/80ths or a multiple of 2.25 x the initial amount of pension payable, for lump sum. For employees with continued rights it will be on the basis of the greater of N/60ths (total benefits) and 3N/80ths (lump sums) and, N/NSxP (total benefits) and N/NS x LS (lump sum) (see PSIPart 10 Section 1).

Contact: | Date issued: | Next review: