RPSM03110010 - Technical Pages: Protecting pension rights from tax charges: Retained benefit practice before 6 April 2006: October 1970

IR 12 Practice Notes October 1970 version

Retained benefits

79

A pension on the basis of N/60ths may always be provided irrespective of the retirement benefits the employee has earned by earlier service with other employers (“retained benefits”). If, however, it is desired to give benefits in excess of N/60ths, whether on the “uplifted 60ths” scale equivalent of the retained benefits, they will not exceed two-thirds of the employee’s final remuneration or by reference to any other accrual rate higher than N/60ths, the current benefits must be restricted so that when aggregated with the pension

80

“Retained benefits” include pensions provided for the member under other schemes, whether they are deferred or already in payment, inclusive in both cases of any parts of those pensions which have been commuted or are commutable; retirement annuities under section 226, Income and Corporation Taxes Act 1970 in respect of previous self-employment or non- pensionable employment; and the annuity value, assuming accumulation at interest to normal retirement age, if only lump sums paid or payable and of amounts received by way of refund of contributions. Small deferred pensions not exceeding in aggregate £52 and lump sums and refunds not exceeding in aggregate £200 may as a practical measure be ignored

Retained benefits lump sums

95

A lump sum of 3N/80 may always be given to a late entrant under any scheme approved under the new code, but any increase under the preceding paragraph is subject to the proviso that the increased lump sum shall not when aggregated with the value at retirement age of any lump sum retirement benefit received or receivable in respect of service with a former employer exceed 120/80ths of final pay.