PSI6.5.57 - Total Benefits on Retirement at Normal Retirement Age: Maximum Total Benefits - Retained Benefits Paid or Already in Payment

(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)

[PN16.38]

Where a pension from an earlier employment or occupation is already in payment, it has an enhanced value because of its earlier payment. For retained benefit purposes it may, nevertheless be taken into account at its current amount but see PSI6.5.62-63 if it is subject to revaluation. Similarly, in the case of lump sum benefits which have already been paid, they may be taken into account at their actual amount and their pension equivalents (see PSI6.5.56) calculated as if received or to be received concurrently with the current employer’s scheme benefits.

A pension which is already in payment under a drawdown facility should be valued for Retained Benefits purposes as follows:

• where the pension is being paid from a Personal Pension Scheme, on the basis of the maximum amount which is currently capable of being withdrawn i.e. the 100% amount determined by the GAD Tables
• where the pension is an employer funded benefit being paid from an approved scheme or a buy-out contract, on the basis of the maximum amount which is currently capable of being withdrawn (see PSI25.2.4)
• where the pension is being paid from an AVC fund, on the basis of the pension equivalent determined when benefits from the employer first become due and payable (see PSI25.3.9).