PSI20.1.28 - Funding and Surpluses: Funding General - Permitted Maximum

(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)

[PN13.17]

The actuary must, in making assumptions of future salary increases for funding purposes, also take account of the requirements introduced by the Finance Act 1989 which restrict the pensionable earnings of employees without continued rights to the permitted maximum. In this respect the actuary should assume that the permitted maximum will increase in line with the Retail Prices Index, subject to a rate at least 3% per annum below the assumed investment return.

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