RPSM09106010 - Technical Pages: Member benefits: Scheme administration member payments

A scheme administration member payment

A registered pension scheme may make payments to or in respect of a member for the purposes of the administration or management of the scheme. Such payments are referred to in the legislation as scheme administration member payments and are authorised member payments.

Payments covered

These are general administration costs of running the scheme, whether or not paid to the member. The sort of things that are covered by the above are

• the payment of wages, salaries, fees etc to persons involved in the administration of the scheme ( scheme administrator, lawyers, advisors etc.), and
• payments relating to the purchase of scheme assets (property purchase costs etc.).

HMRC have the power to lay Regulations in order to detail what payments are, or are not, a scheme administration member payment.

Payments must be reasonable

The payments made must be reasonable, and paid at a rate commensurate with an arm’s length rate. Where an excessive rate is paid any amount over this arm’s length rate will be an unauthorised member payment and taxed as such.