PSI10.1.9 - Retirement before Normal Retirement Date: General - Limits on benefits - Option for FA 1989 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)

[PN7.27]

As a consequence of opting under PSI10.1.8(iii) or (iv) continued rights members will cease to be entitled to continued rights and become subject to Finance Act 1989 requirements. This means that their final remuneration will be subject to the permitted maximum and their maximum approvable lump sum retirement benefit will be calculated as a multiple (2.25 x) of their pension. Schemes wishing to include the right to opt as above should amend their rules accordingly but we do not object if, for members leaving the scheme in the meantime, the trustees feel able to provide benefits on this basis under their powers of augmentation.

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