PSI8.2.13 - Lump Sum Benefits and
Communication: Commutation Factors - Fixed Rate Factors
(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)
If fixed rate factors are used they must correspond with
those in
PSI8.2.12 (a). and (e). as appropriate
to the above table. This basis is simple to operate and is
acceptable to us because:
- it is broadly consistent with the basis
used in public sector type schemes which give a separate pension
and lump sum -see (
PSI6.5.3), and
- the results should even out overall. For
example a factor of 9:1 is low for a man retiring at age 60, about
right for retirements at age 65 and high for retirements over that
age.
