(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)
PN10.1
S612 ICTA 1988
Most schemes contain a provision allowing employees to retire
on pension before NRD. Any rule allowing early retirement must,
however, be directly linked to the termination of an
employee’s service. It is not acceptable for an employee
(including a director, officer of the company or other person
taking part in the management of the affairs of the company) to
receive
any retirement benefits before NRD in advance of
leaving service - but see
PSI25.3.1 in relation to the
payment of AVC benefits.
Leaving service: Merely changing from full-time to
part-time service is not sufficient grounds for claiming early
retirement benefits. Furthermore, in the case of a director, the
member must cease to be a director of the company and leave service
in order for early retirement benefits to be paid (subject to
PSI10.1.3).
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)PSI10.1.29(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
If an employee takes early retirement,
all benefits under the scheme must be taken (but
see PSI25.3.1 in relation to the payment of AVC benefits). It is
not permissible, for example, to take the lump sum but defer
drawing the pension. (Deferred benefits on withdrawal from service
are dealt with in Part 13
PSI13.1.1.)
