PSI11.3.12 - Benefits on Death in Service: Widow(er)s' and Dependants' Pensions - Limit on Pension

(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)

[PN11.7]

The main limit on a pension payable following an employee's death in service is that it should not exceed 2/3rds of the maximum pension the employee could have received if he or she had continued in employment up to NRD, ie the limit appropriate to early retirement on grounds of incapacity on the date of the employee's death (see PSI10 Section 2 PSI10.2.7). When the limit in PSI10.2.7 is applied

• any restriction to take account of the deceased employee's own retained benefits can be excluded, but
• the effect of a pension debit must be included (see PSI10.2.9) where the deceased employee’s benefit entitlement in any scheme of the employer is