PSI4.3.8 - Maximum Contributions: Earmarking of 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)

AVCs paid into an employer's main scheme which is set up as a common trust fund, form part of the common pool of assets and should normally be treated in the same way as the other contributions. Nevertheless, we allow them to be segregated from the main fund and applied towards policies which are earmarked exclusively for the benefit of individual employees. The trustees thus hold not only a common fund of investments, but also a group of separately designated insurance policies. Where the scheme rules are in this form you can accept provisions which, on winding-up, give different priorities for the assets held in the common and segregated funds.

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