PSI11.2.5 - Benefits on Death in Service: Lump Sum Benefits - Alternative Limit - Scheme Rules

(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]

The limits outlined in PSI11.2.1and PSI11.2.4enable the maximum benefit to be ascertained quite simply. Consequently, there is no reason why the limit should not be fully and accurately defined in the scheme rules. You should not accept a limit rule drafted in vague terms such as "4 times salary or such lesser amount as will not prejudice approval".

Scheme rules should not combine the two alternatives of 4 times final remuneration or twice final remuneration as they are mutually exclusive.