PSI20.5.1 - Funding and Surpluses: Insured Schemes - Common Trust Funds - General

(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)

The funding of an insured scheme which operates through a common trust find is as complex as most self-administered schemes. Without an actuarial valuation it is not possible to examine the basis on which it is funded. But, for reasons explained in PSI20.3.5, particularly where scheme membership is limited to ordinary arm’s-length employees, excessive funding is unlikely. The benefits promised are often well below our limits and the premiums themselves are subject to market forces: an employer will not pay more than it has to.

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