(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)
Another feature of section 31 of the Welfare Reform and
Pensions Act 1999 is the revaluation of the deferred pension
equivalent of the pension debit (see
PSI6.5.95-96) established from the
percentage reduction in the cash equivalent transfer value of the
employee’s benefit rights at the time of the pension sharing
on divorce order (see
PSI6.5.87). The revaluation period is
from the time of the divorce order to the payment of the
employee’s benefits. For Revenue limits purposes this ensures
that the value of the percentage reduction in the employee’s
benefit rights does not start to reduce in real terms over the
period of time between the divorce order and the eventual payment
of benefits to the employee. The pension debit is measured in terms
of a deferred pension that the employee could have received from
the amount of the debit required by the pension sharing order. This
means that the deferred pension equivalent is revalued by reference
to statutory revaluation orders under Social Security
legislation.
