PSI10.1.31 - Retirement before Normal
Retirement Date: General – Pension Sharing on Divorce –
Post FA 89
-
(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)
Total benefits
Where an employee’s benefit entitlement in the scheme
is
- permanently reduced by a pension sharing
on divorce order (see
PSI3.5.4), and
- the pension debit must be taken into
account for Revenue limits purposes (see
PSI6.5.89)
the maximum permissible total pension benefit for the employee
must not exceed
- the amount of pension benefit that could
have been paid to the employee had there been no pension sharing on
divorce order (see
PSI10.1.7)
less
- the pension equivalent of the pension
debit (see
PSI10.1.33).
Lump sums
The maximum permissible lump sum benefit must not exceed
- 2.25 x the initial rate of pension payable
(see
PSI10.1.7) after reduction to take
account of the pension debit (see
PSI10.1.33) where the lump sum is by
commutation of pension, or
- 3 x the initial rate of pension payable
(see
PSI10.1.7) after reduction to take
account of the pension debit (see
PSI10.1.33) where the scheme rules
provide for a pension and separate lump sum.
