PSI14.2.39 - Transfer Payments: Benefits from Transfer Payments - Benefits for Added Years

(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 total benefits that the receiving scheme can provide will be those appropriate to prospective service up to, and final remuneration, at NRD with the new employer plus those attributable to the number of added years that the transfer is sufficient to buy in the scheme. The aggregate may exceed two-thirds of final remuneration only if the accrual rate in the receiving scheme is 1/60th of final remuneration for each year of service or less, or has been restricted to that level in respect of years of service with the current employer (see also PSI14.2.10and PSI14.2.47).

Pension: Pension benefits given for the added years should be based on strict 60ths (or the accrual rate under the receiving scheme) or can be expressed as a percentage of final remuneration. The added years must not be aggregated with the years of service with the final employer for the purposes of augmentation by the final employer on an uplifted scale (viz giving benefits above N/60ths).

Pre-Finance Act 1989 Members

[PN10.29]

Lump sums: Where a member has continued rights in the receiving scheme the benefits given for the added years should be based on 3N/80ths of final remuneration from the final employer for each added year given (subject to PSI14.2.16). Again, the added years must not be aggregated with years of service with the final employer for the purposes of augmentation by the final employer on an uplifted scale. However, if greater, the amount of the lump sum specified in a certificate, which may then be enhanced in proportion to the increase in the Retail Price Index can be provided instead.

Contact: | Date issued: | Next review: