PSI10.2.7 - Retirement before Normal Retirement Date: Incapacity Retirement - Revenue Limits
(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)
[PN 6.2]
At the date of retirement the member may be given a pension
and lump sum of the same fraction of final remuneration that could
have been received if he or she had remained in service until NRD.
Final remuneration should be calculated in accordance with all our
requirements in Part 6, Section 4 but with the actual date of early
retirement substituted for NRD.
Example 1 (pre-17 March 1987 continued rights
members)
Member retires because of incapacity after completing 5 years out of a potential 20 years' service to NRD. The member may be given a pension of 40/60ths x final remuneration and a lump sum of 120/80ths x final remuneration, ie, full uplift (see PSI6.5.6 and PSI8.1.23) for potential service.
Example 2 (pre-1 June 1989 continued rights members and Finance Act 1989 members)
In the same circumstances as above the member may also be given a pension of 20/30ths x final remuneration, ie, full uplift for potential service. The lump sum will also be uplifted via the application of the formula in PSI8.1.24 for pre-1 June 1989 continued rights members and by the multiple in PSI8.1.25 for Finance Act 1989 members.
The limits described above are modified (see PSI10.2.9) where a member’s benefit entitlement in the scheme is
