PSI10.1.7 - Retirement before Normal Retirement Date: General - Limit On Benefits-Post-FA 1989 Discretionary Basis
(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)
[PN6.1]
As explained in
PSI9.1.1, changes in
discretionary practice linked to the statutory changes introduced
by Finance Act 1989 have simplified our requirements in relation to
retirement before or after the scheme NRD in order to recognise the
concept of retirement at any time between the ages of 50 and 75.
For Finance Act 1989 members of schemes approved on or after
27 July 1989 the maximum total benefits approvable on retirement at
any time after age 50 is N/30ths of final remuneration (subject to
the permitted maximum (see
PSI6.4.7-11)) for each year of
service up to a maximum of 20/30ths, provided this does not exceed
2/3rds of final remuneration when aggregated with retained benefits
(see
PSI6.5.51-69).
The maximum approvable lump sum retirement benefit on
retirement at any time after age 50 is the greater of 3/80ths of
final remuneration (subject to the permitted maximum) for each year
of service (up to 40 years) (see
PSI8.1.21) and an amount
equal to 2.25 times the initial annual rate of pension to be paid
(see
PSI8.1.25).
The pension and lump sum limits are modified (see
PSI10.1.31) where a member’s
benefit entitlement in the scheme is
