PSI13.4.1 - Withdrawal from Service: Deferred
Benefits under Individual Policies (Buy-Out Policies) - Bought-Out
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)
[PN10.37]
An early leaver's deferred benefits may be provided by the
scheme itself or, if the rules permit, by means of "buying-out"
(see
PSI13.1.3c and
PSI13.1.9b). Buying out is normally
accomplished as follows:
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
- Where the employee's benefits are secured
by an individually earmarked insurance policy or policies, by the
surrender of the policy or policies and the utilisation of the
proceeds to purchase a deferred annuity in the employee's name from
a Life Office of his or her choice. Such policies are known as
"buy-out".
- Where the scheme secures benefits through a
group policy or is self- administered, the administrator will
realise sufficient funds to purchase a deferred annuity as in (a)
above.
