PSI7.1.10 - Increases of Pensions in Payment: General - Increases on Assigned 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)

As an alternative to buying-out, an individual annuity policy or policies held for the provision of an employee's (or widow's/widower's/dependant's) benefits under the scheme can be assigned to the employee or to the widow/widower/dependant as appropriate. The situations in which this can happen are:-

1. on leaving service (see Part 13, Section 4),
2. on the winding-up of a scheme (see PSI16.2.15), or
3. on the outright purchase of an immediate or deferred annuity under approved Hancock arrangements (see PSI1.1.17).

Pensions under such policies may be increased during the period of deferment (see PSI13.3.21). Once they come into payment, they may provide increases in accordance with PSI7.1.1. The general principles which apply to increases on buy-out policies (see PSI7.1.9) apply equally to increases on assigned policies.