PSI13.1.11 - Withdrawal from Service: General - Other Alternatives - Option Available for Short Service Benefits

(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)

Scheme rules must give an early leaver the same options in relation to SSB as would have been available had he or she stayed to normal pension age. For example, if at normal pension age the member could have commuted his or her pension for a lump sum, the same option must apply to the short service benefit. This principle of parity does not extend to the alternatives to short service benefit in PSI13.1.9-10. So although we cannot apply our normal limits to the preserved short service benefits (see Section 3 of this Part PSI13.3.1) we can limit the permitted alternatives in the conventional way.

Scheme rules must contain express provisions to meet the preservation requirements: the early leaver's rights are not established by the legislation but derive from the rules of the scheme. A scheme must satisfy preservation whether or not it is approved for tax purposes.

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