(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)
In the case of individual arrangements and discretionary
earmarked schemes the Life Office estimates each member’s
prospective benefits and the contributions required to provide
them. This individual costing basis makes it possible to check that
prospective benefits and contributions are not excessive. However,
it is clearly not productive to check the level of funding in every
case. The ABI Guidance Notes contain (in paragraphs a8a 3.1 to a8a
3.5) an explanation of the de minimis limit under which no check
against the maximum funding rate is required. Existing schemes
which increase contributions will not require checking against the
new guidelines so long as the increased contribution remains below
the de minimis limit.
