PSI25.1.7 - Flexibility in Pension Provision – Introduction - Simplified Defined Contribution Schemes

(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)

Such schemes, which are not contracted out, are able to offer an income drawdown facility. The general requirements and conditions explained in PSI Part 25 Sections 1& 2 apply with the following exceptions:

• There are no limits on the amounts payable in pension form, nor on any benefit payable upon the death of the member
• The lump sum of 25% of the total value of the employee's aggregate retirement benefits may be taken on retirement notwithstanding the fact that the member elects for income drawdown immediately following retirement