PSI11.1.10 - Benefits on Death in Service: General Permitted Maximum

(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)

[PN11.3]

Where, in relation to the limits in PSI11.2.1and PSI11.2.4, the scheme rules give post- Finance Act 1989 members an entitlement to death in service benefits calculated using a multiple of annual remuneration, that annual remuneration must be restricted in the rules to the permitted maximum. So where, for example, the scheme provides a death in service lump sum benefit of twice final remuneration, the scheme cannot provide in respect of a Finance Act 1989 member dying in 1995/96 with final remuneration of £150,000, a lump sum death benefit of £300,000 on the basis that this does not exceed 4 x the permitted maximum in 1995/96 (4 x £78,600 = £314,400). However, there is no objection to the inclusion of a power of augmentation whereby the death in service lump sum benefit can be increased, subject to retained benefits (see PSI11.2.1-3) to a maximum of 4 x the permitted maximum.

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