PSI6.4.43 - Total Benefits on Retirement at Normal Retirement Age: Pensionable Remuneration and Final Remuneration - Incapacity

(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)

[PN Glossary]

Our practice also recognises the problems of the employee who because of incapacity suffers a large reduction in pay for more than 10 years up to NRD. In these cases final remuneration may be calculated using one of the definitions in PSI6.4.15but with the reference to NRD replaced by the date that normal pay ceased. The amount calculated in this way may then be increased to keep it in step with movements in the Retail Prices Index between that date and pension commencement date. This relaxation does not apply where the employee leaves service early due to incapacity where the benefit will be determined at that time and can be index linked thereafter during payment or deferment (see Part 10).

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