RPSM03301040 - Scheme Administrator
Pages: Protecting pension rights from tax charges: Valuing pension
rights: Uncrystallised rights – other money purchase
Valuing uncrystallised rights - money purchase schemes (other
than cash balance schemes)
The value of the member's pension rights is the total of two
figures, both taken at 5 April 2006
- the amount of cash held to provide the
member’s benefits, plus
- the market value of the other assets held
to provide the member’s benefits.
Any loans or other indebtedness should be included in the
calculation.
See also
RPSM03301041 on the valuation of
insurance policies.
Where the
other money purchase arrangement is in an
occupational pension scheme a further calculation must be done to
ensure that the individual is not given protection for benefits
above HMRC limits - see
RPSM03301070.
The types of pension scheme where this further calculation
for HMRC limits needs to be made are;
- a retirement benefits scheme approved under Chapter 1 Part 14
ICTA 1988
- a scheme formerly approved under section 208 ICTA 1970
- a relevant statutory scheme (as defined in section 611A ICTA
1988) or a scheme treated by HMRC as if it were a relevant
statutory scheme, and
- a deferred annuity contract (section 32 policy) entered into in
relation to (a) to (c) above inclusive.
If the calculation for HMRC limits gives a lower value it is the
lower amount that is protected.
