(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)
In the context of lump sum retirement benefits, retained lump
sums are relevant only in the case of members with pre-17 March
1987 continued rights. For all other members they may be ignored
(see
PSI8.1.24-25). For those members with
pre-17 March 1987 continued rights, if the lump sum retirement
benefit does not exceed the 3N/80ths scale a restriction for
retained benefits is not necessary. But where the lump sum
retirement benefit exceeds that scale then the aggregate of all
lump sum benefits from the current employer's scheme(s) and
retained benefits must not exceed 1½ times final remuneration.
As with total benefits this is subject always to the proviso that
the restriction on the current scheme benefits should not have the
effect of reducing them below 3N/80ths (see also
PSI6.5.54). If a pre-17 March
1987 continued rights member joins a scheme on or after 31 August
1991 and fulfils the criteria in
PSI6.5.51all retained benefits (ie including lump sums) are
ignored.
