PSI26.1.13 - Scheme requirements for conversion – General - Schemes which cannot convert

(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)

Schemes which do not satisfy the conditions in 26.1.11 above cannot convert. Furthermore the following schemes may not apply to convert:

• final salary schemes or part schemes. Final salary schemes would need to change the rules to become money purchase schemes prior to conversion to become eligible;
• statutory schemes (public sector schemes);
• Free Standing Additional Voluntary Contribution schemes (FSAVCs);
• schemes not yet approved under Chapter I;
• schemes under investigation by Audit or HMIT (possibility of withdrawing the scheme’s approval);
• common trust funds (individual members are not allocated assets and Inland Revenue legislation requires a personal pension scheme to have earmarked assets for each). To be eligible the structure of the scheme would have to be reviewed to identify and allocate assets to each member;
• schemes including a member whose benefits have vested;
• a part of an occupational scheme to a stakeholder pension scheme. DWP do not have powers to regard one trust as two schemes (see PSI26.1.10) and the stakeholder requirements must apply to the whole scheme in DWP eyes.

Final salary schemes would need to change the rules to become money purchase schemes prior to conversion to become eligible.