(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)
A death in service scheme can be approved without any pension
sharing on divorce provisions in its rules (see Introduction 4.18)
if the only benefit provided by the scheme is a lump sum in the
event of death.
If the scheme has provisions that might allow for a pension
to be paid to the widow, widower or dependant of the deceased
member, pension sharing on divorce provisions will be required as a
condition of approval. The only provision that will be required is
a limitation on the widow, widower or dependant(s) pension in
respect of a deceased member, whose benefits in relation to the
employment were the subject of 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 death in
service scheme, in itself, is not likely to be the subject of a
pension sharing order (see
PSI11.2.6) but it is possible for the
deceased member to have been a member of another scheme of the same
or associated employer which was the subject of such an order.
Putting the limitation in the death in service scheme ensures that
the effect of the pension debit on the maximum permissible benefits
payable (see
PSI11.3.12) is not ignored.
If a death in service scheme that
makes a subsequent rule amendment to include the provision of a widow, widower or dependants pension, or a pension benefit for the member, appropriate pension sharing on divorce provisions must also be included as a condition of ongoing approval.
