PSI14.3.6 - Transfer Payments: Assignment of Policy to a New Employer - Assignment of Policy With Documents - Individual 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)

Whether or not continuous service is acceptable in the circumstances described in PSI14.3.5 must be determined on normal principles and you should consider this in accordance with the guidance given in PSI6.5.71-73. Where continuous service is not acceptable bear in mind that although the policy is assigned to the new employer, the benefits it secures will relate to two distinct employments. The benefits under the policy must therefore be split so that:

1. the benefits already accrued in respect of service with, and final remuneration from, the former employer are treated as derived from a transfer payment (see Section 2 of this Part), and
2. the benefits for service after the change of employment relate only to remuneration and service in the new employment.

You will often find that no clear information is given about the split of benefits between pre- and post-assignment service. Unless the aggregate benefits are clearly going to be small ask for details of the benefits accrued at the date of assignment and for an estimate of the benefits that will be secured at the member's NRD with the new employer. Check that the prospective benefits are not excessive.