(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)
Transfers are not permitted out of a scheme/arrangement once
the member's pension and/or lump sum benefits have come into
payment except where additional voluntary contributions benefits
are in payment prior to the commencement of main scheme benefits -
PN Appendix XII refers. (But see PSI 14.1.9 where the transfer is
part of a restructuring of the employer's pension arrangements)
If the member is in more than one scheme of the employer the
drawing of any main scheme benefits from one scheme will preclude
the transferring of benefits from the other scheme or schemes even
if the member has yet to receive any benefits from those schemes.
A benefit is regarded as coming into payment, or vesting,
when retirement takes place, regardless of any delays in payment.
If a member is in the pensionable service of an employer up to the
normal retirement date of that pensionable service and leaves the
service of the employer at that date, it is a condition of tax
approval that benefits must come into payment. The member cannot
arrange for a transfer to be made to some other tax approved scheme
as an alternative to receiving immediate benefits from the scheme.
If a member is in pensionable service up to normal retirement
date and continues in the employer's service beyond that date,
whether or not the service is pensionable service, benefits must
come into payment on the eventual date of leaving service (or age
75 if earlier in the case of members subject to the post FA89 basis
for retirement). A transfer cannot be made as an alternative to
receiving benefits that have come into payment in the scheme.
Arrangements for the transfer would need to be made before the
member leaves the service of the employer or age 75 if earlier in
the case of those members whose benefits come into payment by that
age.
Transfers are permitted
into a scheme/arrangement in which the member has
benefits in payment, provided the receiving scheme/arrangement is
not a personal pension scheme. If the member has already taken a
lump sum benefit in the receiving scheme / arrangement, no further
lump sum benefits can be paid in respect of the transfer
payment.
