PSI25.3.11 - Flexibility in Pension Provision – Flexible Use of AVCs - Death of Member While Receiving AVC Income Drawdown

(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 the member dies after taking an AVC pension and before taking employer funded benefits the existing rules on death in service will apply, as described in PSI part 11

• The AVC fund, in the form of a return of the employee's contributions (including interest) can be dealt with in accordance with PSI11.2.15
• Alternatively, some or all of the AVC fund may be used to provide a pension to a survivor
• The survivor may elect for drawdown on their benefit if the rules of the scheme permit
• Any surplus must be dealt with under normal rules.

If the member dies after taking employer funded benefits the existing rules on death in retirement will apply (see PSI Part 12).