PSI21.3.22 - Centralised Schemes: Non-Associated Employers - Limits on Benefits - Lump Sums

(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)

[PN21.17]

The limit on lump sum retirement benefits is more stringent than for pensions. If an employee moves from one participating employer to another the lump sum retirement benefit must be calculated on the “successive slice” method (see PSI21.3.21). This requires the benefit to be calculated separately for each employment on the basis of 3/80ths of final remuneration for each year of service with that employer. The lump sum payable under the scheme is then the total of these “successive slices”.

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