PSI20.5.2 - 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)

If, exceptionally, you need to enquire into the state of funding, find out details of the basic assumptions employed by the Life Office actuary (see Section 1 and PSI20.3.3- 5). And where the scheme has been in existence for several years, ask whether there are any unallocated reserves held under the policy. An unallocated reserve or contingency fund of up to 5% of total liabilities is acceptable (see PSI20.6.10). Circumstances which may warrant a funding enquiry include, for example, a significant change in the level of employer contributions, including perhaps the payment of a large special contribution.

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