PSI14.2.44 - Transfer Payments: Benefits from Transfer Payments - Benefits for Added Years - PSO Concern with Calculation

(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 calculation should not result in the receiving scheme giving the member more added years than is justified by the money transferred. This would be a hidden augmentation by the new employer contrary to basic principles (see PSI14.2.1). Such augmentation will arise if the estimated rate of interest on the transfer value is too high or the estimated final remuneration is too low. In these circumstances the transfer value will not produce sufficient money at NRD to buy the promised benefits. The balance required to make up the difference will have to come from the new employer and this is unacceptable.

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