PSI25.3.3 - Flexibility in Pension Provision – Flexible Use of AVCs – Sources of AVCs

(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)

An employee may choose to take avcs from the avcs element within an employer's main scheme, and defer benefits from a FSAVC scheme, or vice versa. It will not be possible, however, to take only a part of the AVC benefits from either source and defer the remainder of the AVC benefits from that source, except to vary the amounts as described in PSI25.2.5 or to take a lump sum from a pre 8 April 1987 arrangement and defer the residual pension benefit (see PSI25.3.7)

Membership of an FSAVC scheme covering more than one employment will be regarded as producing a separate source for each employment. This is consistent with the existing requirements notionally to segregate FSAVC benefits arising from separate employments. An AVC element in a scheme of the employer which consists of more than one policy, or FSAVC schemes relating to the same employment, will be regarded as a single source.