PSI6.1.16 - Total Benefits on Retirement at
Normal Retirement Age: General - Payment of pensions Variable
Benefits
-
(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)
Despite
PSI6.1.15, we do not object (subject to
certain conditions) to the use of an investment linked pension, ie,
one payable from the proceeds of an annuity policy which remains
investment linked after it comes into payment and may, if the
investment performs badly, have to be reduced. the conditions are:
- that the annual rate of pension payable
must not at any time exceed the normal Revenue maximum (including
any cost of living increases for the period since payment of the
pension began - see Part 7). Let the Divisional Manager see any
case where this restriction is disputed;
- that a fluctuating pension must not be
forced on a pensioner. The scheme rules should let the employee
choose at retirement whether to take an investment linked pension
or one that cannot be reduced below its initial annual rate.
Some schemes of this type offer a guarantee that the pension
will not fall below some minimum level but we do not require this
as a condition of approval.
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