PSI10.1.3 - Retirement before Normal Retirement Date: General - Date of Commencement

(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)

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Immediate payment of benefits on early retirement is not a permissible feature in a scheme for which mandatory approval is sought under section 590, ICTA 1988 (see PSI2.3.7). It is however specifically mentioned in section 591(2)(d) as being acceptable in a scheme submitted for discretionary approval. Except where retirement is due to incapacity (see Section 2 PSI2.1.1) immediate benefits can only be given on retirement within 10 years of the specified age. We interpret this to be within 10 years of the earliest age specified in section 590(3)(a), ie, 60. An employee who retires early can therefore have immediate benefits if aged 50 or more. An employee who leaves service earlier than this age can only be given deferred benefits (see Part 13 PSI13.1.1.