(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)
[PN7.38]
Schemes approved before 27 July 1989 will have late
retirement rules on the pre-Finance Act 1989 basis for all members
(viz including Finance Act 1989 members) (see PSI9.1.15). They may,
however, extend the post-Finance Act 1989 "package" (N30ths on
early or late retirement and leaving service) to their past and
future members by giving each of them the right to opt for it. The
option must be exercised before employer funded benefits commence,
are bought-out or otherwise transferred outside the employer's
scheme(s) or the attainment of age 75, whichever occurs first.
Although this may represent a restriction on the benefits available
on late retirement it will form part of the package which allows
greater benefits on early retirement (see PSI10.1.8). However, for
continued rights members of such schemes, it carries with it the
imposition of the permitted maximum for calculating final
remuneration and the Finance Act 1989 basis for calculating the
maximum approval lump sum as a multiple (2.25 x) of pension.
Schemes approved on or after 27 July 1989 must contain late
retirement rules on the pre-Finance Act 1989 basis (see PSI9.1.15)
for members with continued rights. However, as above, such members
may be given the right to opt for the post-Finance Act 1989
"package". The option must be exercised within the same timescales
described above and carries with it the same impositions.
[M100]
Schemes wishing to include the right to opt as above should
amend their rules accordingly but we do not object if, for members
leaving the scheme in the meantime, the trustees feel able to allow
it under their powers of augmentation.
