(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)
A career average or average salary scheme is one that
calculates pension by reference to annual average remuneration over
the whole pensionable service. Some of these schemes provide
benefits based on the average salary revalued, (with revaluation
reflecting changes in the general level of earnings).
These sorts of schemes (which are rare) are subject to the
same overall limits on benefits as a final salary scheme. The lump
sum retirement benefit must be based on a “normal”
definition of final pensionable pay,
not the revalued earnings, or be subject to a
normal limit based on “final remuneration”.
