PSI5.1.1 – Contributions by Employers: General - General

(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)

[PN5.1]

It is a condition of approval under Chapter I, Part XIV ICTA 1988 that the employer must contribute to the scheme. It is a "prescribed condition" under section 590(2) on two separate counts: section 590(2)(d) simply requires that the employer is a contributor to the scheme. In addition, the benefits provided by the scheme will not be "relevant benefits" for the purpose of section 590(2)(a) unless they are "given" in respect of service as an employee - see the definition of "relevant benefits" in section 612. There is one exception to this however; with effect from 26 October 1987, we have been prepared to approve schemes for employees to which their employers do not contribute - Free Standing Additional Voluntary Contribution Schemes (FSAVCSs) - section 591(2)(h). The employee must, however, be simultaneously accruing benefits under an approved or relevant statutory scheme to which the employer contributes (see PSI4.4.2).