(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)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
The employer must therefore make some quantifiable
contribution to the supplementary scheme, although it does not have
to be as much as 10% of the total cost. A lower rate of
contribution can be accepted if the employer bears at least 10% of
the aggregate cost of both the main and supplementary schemes.
Where the supplementary scheme is self-administered, payment by the
employer of just the administrative costs is acceptable if the
scheme's actuary confirms that this will involve a material outlay.
This applies also to large insured schemes where significant
administration costs, quite separate from the premiums, are
normally involved. But this is not satisfactory for small insured
schemes: the employer must actually contribute a proportion of the
premium. Where there is no evidence of a broker being involved the
employer may in some cases be receiving from the Life Office
commission on the whole premium (including the employee
contributions) which may equal or outweigh the percentage
contribution the employer is making. In this situation we are
concerned with the net contribution.
