RPSM03104540 - Technical Pages: Protecting pension rights from tax charges: Enhanced protection: Relevant benefit accrual: Post commencement earnings limit

Relevant benefit accrual under enhanced protection: the post commencement earnings limit

There are two different definitions of the ‘post commencement earnings limit’. The definition used depends on whether or not on 5 April 2006 the individual was a ‘capped’ member under any scheme providing cash balance or defined benefits in respect of the employment for which relevant benefit accrual is being tested.

A capped member is someone who was subject to the 1989 earnings cap. Other known terms for such a member are 1989 member, post 1989 member or class A member.

Paragraph 16 Schedule 36 defines what the post commencement earnings limit is for capped members. RPSM03104550 gives details.

The post commencement earnings limit for non-capped members is prescribed by paragraph 17 Schedule 36 and RPSM03104560 gives details.

Schemes that the post commencement earning limit does not apply to

The post commencement earnings limit does not apply to

• a relevant statutory scheme (as defined by s611A ICTA 1988),
• a scheme treated by HMRC as if it were a relevant statutory scheme,
• a Parliamentary scheme or fund mentioned in s613(4)(b) to (d) ICTA 1988.