PSI6.5.59 - Total Benefits On Retirement At Normal Retirement Age: Maximum Total Benefits - Benefits Under With- Profits Or Investment- Linked Policies

(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)

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

[PN16.24]

You may be asked about the valuation of deferred benefits secured by policies which continue to share in profits or are investment-linked. This is most likely to happen when a new employer is first arranging benefits. In such cases the retained benefit should be valued on the following assumptions:

1. Where the projected maturity date is less than 5 years ahead the valuation should assume that current bonus rates will continue or will be similar to current yields.
2. In other cases the valuation should normally assume, for both types of policy, a compound growth rate of not less than 9% per annum, net of expenses.