(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)
There are 3 main ways of providing relevant benefits for
employees under a retirement benefits scheme. First, they can be
paid direct by the employer “out of the till” as they
fall due, in other words an unfunded scheme or arrangement (see
PSI1.1.15). Schemes set up by
private sector employers which operate in this way offer little
security to retired employees. If the employer suffered a large
reduction in profits, or, worse still, went into liquidation, there
would probably be no money to pay the promised benefits.
