(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)
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
Under deposit administration the contributions paid are left
in a pool to accumulate with interest or bonuses, ie they are held
as a deposit by the Life Office. When benefits to members become
payable, money is taken from the pool in the form of cash on
withdrawal to cover lump sum payments or to purchase annuities.
This arrangement is not an insurance contract, the Life Office is
not on risk to provide benefits, but rather performs the role of
investor. The mortality risk before retirement is carried by the
scheme trustees.
