RPSM03110100 - Technical Pages: Protecting pension rights from tax charges: Retained benefit practice before 6 April 2006: September 1991 Armed Services pensions
IR12 Practice Notes September 1991 version
16. 30 Armed Services pensions
| RETIRED BENEFITS (PENSION) | PENSIONS IN PAYMENT
MEMBER OVER 55 | PENSION IN PAYMENT
MEMBER UNDER 55 | PENSION IN DEFERMENT |
| RETIRED PAY (OFFICERS) LONG SERVICE PENSION (OTHER RANKS) | Pension in payment
(includes cost of living to date)
Add 5% pa to new NRD | Pension in payment
(Cost of living not yet included) Add notional cost of living to date Then add 5% pa to new NRD | Pension in deferment
Add notional cost of living to date Then add 5% pa to new NRD |
| RESETTLEMENT COMMUTATION | Nothing
(added back to pension at age 55) | Add back actual amount of
surrendered retired pay to pension in payment
Add notional cost of living to date Then add 5% pa to new NRD | |
| LIFE COMMUTATION | Immediate life annuity value at new NRA of the actual amount, using rates prevailing at time of joining new scheme | Immediate life annuity value at new NRA of the actual amount, using rates prevailing at time of joining new scheme | |
| TERMINAL GRANT | - do - | - do - | Immediate life annuity value at new NRA of estimated amount, using rates prevailing at time of joining new scheme |
| RETAINED BENEFITS (LUMP SUM) | TERMINAL GRANT IN DEFERMENT | ||
| Resettlement Commutation ) Life Commutation ) Terminal Grant ) | Actual amount of all lump sums received | Actual amount of all lump sums received | 3 x estimated pension (see above) at new NRA |
Concurrent employments
16.31
Guidance is often sought as to whether retained benefits from
earlier employments/occupations should be apportioned when later
employments are concurrent.
16.32
When calculating benefits from concurrent employments the
treatment of retained benefits from earlier employments or
occupations will vary depending on whether or not the employments
are associated or the relevant schemes are connected. Where the
employments are not associated and the schemes are not connected
any such retained benefits should be apportioned by reference to
the initial remuneration where the concurrent employments commence
simultaneously and each amount treated as a separate retained
benefit. Where the concurrent employments do not commence
simultaneously, the retained benefits should either be set fully
against the earliest employment and ignored for subsequent
employments, or be set fully against the earliest employment and
then re-apportioned (on a remuneration basis) when the subsequent
employments commence
16.33
Where the concurrent employments are associated or the
schemes are connected, the retained benefit in full is set against
benefits from the employment which vest first and any unexhausted
balance is set against the benefits from the other employments
successively as they vest. If all the benefits vest together the
same principle applies but the sequence is immaterial. In this
context the vesting date is as defined in paragraph 16.20
