PSI14.1.9 - Transfers on the restructuring of an employer's pension arrangements

(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 prohibitions on transfers after NRD/once benefits have come into payment do not apply where the employer's pension arrangements are restructured. In these circumstances each transferred member's benefits under the successor scheme should be in the same form and of no smaller amount than was previously payable under the transferring scheme. Where the pension in the transferring scheme is paid under an income drawdown arrangment as described in Appendix XII of PN and a review is carried out at the time of the transfer there would be no objection to the amount of pension being reduced within the 35%/100% level of the recalculated amount. If the member has already taken a lump sum benefit in the transferring scheme/arrangement, no further lump sum benefits can be paid in respect of the transfer payment. Where NRD has been reached in the transferring scheme it cannot be altered in the successor scheme. And even where an employer's pension arrangements are restructured once NRD has been reached it is not permissible to transfer into a personal pension scheme.