(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)
The 2/3rds limit and the common N60ths accrual rate (see
PSI6.5.5) originated from the Civil
Service Pension Scheme. This gives an annual pension accrual of
1/80th of pensionable pay plus a lump sum of three times that
amount (3/80ths of pensionable pay) for a career spanning 40 years
to NRD. Thus a full career pension and a lump sum amount to
40/80ths and 120/80ths of final pensionable pay respectively. This
is broadly equivalent to a pension benefit before commutation of
1/60th of final remuneration over the same period. Hence the
40/60th or 2/3rds limit on benefits at NRD.
