RPSM04102020 - Technical pages: Taxation: Authorised employer payments: What is an authorised surplus payment?
What is an authorised surplus payment?
| S177 The Registered Pension Schemes (Authorised Surplus Payments) Regulations 2006 [SI 2006/ 574] |
An authorised surplus payment is a payment
- made to a sponsoring employer of a registered pension scheme that is an occupational pension scheme, and
- in accordance with regulation 2 or regulation 3 of the Registered Pension Schemes (Authorised Surplus Payments) Regulations 2006 [SI 2006/ 574].
The only registered pension schemes that are likely to have
surplus funds are occupational pension schemes. For example, it is
possible that such a scheme could have limits on the amount of
pension benefits that will paid to or in respect of the members of
that scheme and, whilst funding for those targeted benefits, it is
possible that the value of the scheme’s funds could exceed
the amount of the scheme’s liabilities. Where such a scheme
does have surplus funds, it is possible that rules of the scheme
will allow that surplus to be returned to an employer in relation
to the scheme.
Because of the possibility of a registered pension scheme,
that is an occupational pension scheme, having surplus funds that
might be returned to an employer, payments called authorised
surplus payments are included in the list of
authorised employer payments that can be made
under the tax rules for registered pension schemes.
However, a surplus payment to a sponsoring employer relating
solely to the death of a member must meet additional requirements
for it to be an authorised surplus payment (see
RPSM04102025). For example, such a
payment will not be an authorised surplus payment where the
deceased member was connected with the sponsoring employer at the
date of his or her death.
| Glossary ( RPSM20000000) |
