PSI16.1.1 - Discontinuance of Schemes: General - Introduction

(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)

[PN14.7]

A scheme may be discontinued in various ways (see PSI16.1.3). But, importantly, it cannot normally be approved unless the rules ensure that on winding-up:

1. the benefits to be provided are within approvable limits for the employee's service with and final remuneration from the employer on leaving the scheme, and
2. any remaining surplus funds will be paid to the employer; but see

• PSI16.2.40-49 about certain trust problems relating to schemes formerly approved under the “Old Code” (see Introduction Section 4 paragraphs 4.1-5)
• PSI16.2.21and PSI20.9.16where the scheme winding up is being replaced by another, and
• PSI20.6.13-15 about limited price indexation which restricts the ability of certain types of scheme to make refunds to the employer.