PSI14.1.3 - Transfer Payments: General - DSS Requirements

(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 Social Security Pensions Act 1975 was amended in 1985 to give scheme members leaving service after 31 December 1985 and at least one year before normal pension age (see PSI6.3.2), a right to a "cash equivalent" as an alternative to accrued benefits preserved in the scheme (see PSI13.1.9). As that paragraph explains, for preservation purposes a transfer payment is an alternative to short service benefit. To prevent avoidance of the preservation legislation the employee's "qualifying service" is determined by aggregating periods of pensionable service under both the former and present scheme. Such aggregation of service is not however normally appropriate for the purpose of our maximum Revenue limits (see Section 2 of this Part). We would be prepared to accept such aggregation only where a transfer payment is received from a scheme providing benefits in respect of the same or an associated employment, or from any other scheme where we would agree to continuous service being granted (see PSI6.5.71-73).