PSI6.1.25 - Total Benefits on Retirement at Normal Retirement Age: General - Forfeiture of benefits- Employer’s Lien

(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)

[PN7.21(b) and PN Glossary]

Scheme rules may also enable an employer to recover from the retirement benefits any money due to it through any criminal, fraudulent or negligent act or omission by the employee. Where the debt does not result from the employee’s fraud or negligence, for example a straightforward loan debt, it may be recovered from any benefit which is not subject to DSS preservation requirements. The employer’s right of recovery from the scheme must be expressly limited so that the amount payable to it does not exceed the amount of the actual loss suffered. Nor must the amount recoverable exceed the employee’s interest in the scheme. In the event of a dispute over the amount to be recovered, the employer is not entitled to enforce recovery until after the obligation has become legally enforceable (ie the employer must obtain a Court Order to enforce repayment of the debt).

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