PSI13.3.18 - Withdrawal from Service: Deferred Benefits Return to Pensionable Service

(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)

[PN10.14]

A member who leaves pensionable service by opting out of the employer's scheme while remaining in the employer's service may be allowed to rejoin the scheme at a later date whether it is a defined benefit scheme or a money purchase scheme. Where a member does so, service with the employer for the period whilst not in scheme membership may be taken into account for the calculation of benefits. In these circumstances any benefits from approved personal pension schemes (other than minimum contributions only schemes) and retirement annuity contracts based on relevant earnings from the employer during that period must be treated for limits purposes as though they were benefits provided by the employer (ie they are aggregable benefits). If only service while in scheme membership is taken into account for the calculation of benefits, then any benefits from approved personal pension schemes (other than minimum contributions only schemes) and retirement annuity contracts based on relevant earnings from the employer during that period should, in the case of a Finance Act 1989 controlling director, (in other words one without continued rights), be treated in accordance with PSI6.5.67 and PSI8.1.35, and in the case of any other member be treated as retained benefits. Where benefits from approved personal pension schemes and/or retirement annuity contracts based on earnings from the relevant employer have to be taken into account as either an aggregable benefit or retained benefit, any pension debits in relation to those benefits must also be included if, at the time of the pension sharing on divorce order (see PSI3.5.4) the member did not qualify as a moderate earner (see PSI6.5.90)