PSI13.3.11 - Withdrawal from Service: Deferred Benefits - Money Purchase Schemes
(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)
The preservation requirements do not require a short service
benefit or alternative (see
PSI13.1.7 and
PSI13.1.9 -10) to exceed the long
service benefit, in other words the amount which would have been
provided under the scheme rules at normal pension age (see
PSI6.3.2) at the same level of
remuneration. So on no account should an increase in the short
service benefit or alternative above the normal Inland Revenue
maximum of N/NS x P or N/30ths (as appropriate) cause the resultant
benefit to exceed the maximum benefit which would have been
permissible at normal pension age based on final remuneration at
the date of leaving pensionable service. For schemes approved prior
to 29 November 1991 the limit for an early leaver is a deferred
pension (including the pension equivalent of any deferred lump sum
benefits) of 2/3rds of final remuneration (calculated at the date
of leaving pensionable service) having due regard to retained
benefits, plus any statutory revaluation increases required by the
relevant Social Security legislation. For schemes approved on or
after 29 November 1991 the limit for an early leaver is a deferred
pension (including the pension equivalent of any deferred lump sum
benefits) of the greater of:-
[PN10.13]
- 1/60th of final remuneration for each year of service (up to 40 years) increased in accordance with PSI13.3.8, and
- the total benefit the member could have expected to receive at NRD calculated on the same basis as applies for incapacity (see PSI10.2.7) together with any statutory revaluation increases required by the relevant Social Security legislation.
This limit is modified (see PSI13.3.32) where a member’s benefit entitlement in the scheme is
