PSI5.1.15 - Contributions by Employers: General – Pension Sharing on Divorce – members with pension debits

(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)

[PN5.15]

Participating employers should contribute to a scheme (see PSI5.1.1) and those contributions should be reasonable (see PSI5.1.14) in relation to the benefits to be provided to employees and/or their beneficiaries, widow, widower or dependants of the employee. If an employee’s or former employee’s maximum approvable total benefits are permanently reduced by the effects of a pension sharing on divorce order (see PSI6.5.89), the employer contributions should not lead to benefits in excess of the reduced maximum approvable benefits. The contributions should not be based on the maximum approvable benefits that could have been paid to the employee or former employee had the pension sharing on divorce order not taken place (see example in PSI4.3.18). Employer contributions can be based on the maximum approvable benefits that could have been paid had the pension sharing on divorce order not taken place where the effects of a pension sharing on divorce order can be ignored when calculating maximum benefits (see example in PSI4.3.19 and PSI6.5.90).