(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)
Where
PSI10.1.25 applies there is no
objection to each scheme paying a lump sum retirement benefit, even
though one will be paid on retirement and the other at NRD (but see
PSI8.1.5 in relation to AVC contracts entered into after 7 April
1987 and 25.3.5 where AVC benefits are paid before employer funded
benefits). The amount payable at NRD is limited to the maximum
approvable based on service and remuneration at the date of early
retirement, less the lump sum paid at that time and the value of
any continued life cover. Where the lump sum is calculated on the
basis of 3/80ths of final remuneration for each year of service (up
to 40 years) or, in the case of a pre-17 March 1987 continued
rights member is calculated on the N/NS x LS formula (see
PSI10.1.12), the deferred lump sum may
be increased in line with the rise in the Retail Prices Index.
