PSI12.2.16 - Benefits on Death after Retirement: Lump Sum Benefits and Pension Guarantees - Guarantee payments - 5 Year Guarantees

(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)

[PN12.10]

Where the pension guarantee period does not exceed 5 years an immediate lump sum may be paid as an alternative to continuing payments of the member’s pension (see PSI12.2.7(b)). Our practice permits payment of a lump sum equal to the balance of the pension instalments payable between the date of death and the end of the guarantee period. In practice, however, Life Offices often discount the future instalments of pension when computing the lump sum payment; there is no objection to this.

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