PSI20.4.7 - Funding and Surpluses: Insured Schemes - Earmarked Policies - Death In Service Benefits

(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)

[PN13.13]

Subject to the principles set out in PSI20.1.44-47, contributions up to the levels set out in a. and b. below, may be paid to the type of scheme or arrangement described in PSI20.4.3 for death in service benefits without regard to the contributions being paid to such a scheme or arrangement for post-retirement benefits.

1. A contribution of up to 5% of the maximum future contribution rate under the ABI Guidance notes to secure death in service lump sum benefits up to the maximum permitted (see PSI11.2.1 and 11.2.4) taking into account the value of the retirement benefits fund; and
2. a further contribution of up to 5% of the maximum future contribution rate under the ABI Guidance Notes to secure a spouse’s pension, or a dependant’s pension for a named dependant(s) of an unmarried member, on death in service up to the maximum permitted (see PSI11.3.12).

Contributions in excess of the amounts in a. and b. may be paid (provided the benefit is within the maximum permitted) but the excess must be offset against the maximum contribution for retirement benefits.