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HMRC internal manual

National Insurance Manual

Earnings of employees and office holders: retirement benefits schemes from 6th April 2006 - employer-financed retirement benefits schemes: definition

Paragraph 8 of Part 6 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (as inserted by regulation 8(7) of the Social Security (Contributions) (Amendment No.2) Regulations 2006)

Sections 393A and 393B ITEPA 2003 (as substituted by section 249(3) Finance Act 2004 with effect from 6th April 2006)

For NICs purposes, an “employer-financed retirement benefits scheme “ (“EFRBS”) has the same meaning as that for income tax purposes. Section 393A ITEPA 2003 defines an EFRBS as meaning:

“a scheme for the provision of benefits consisting of or including relevant benefits to or in respect of employees or former employees of an employer.”

But the definition excludes:

  • a registered pension scheme (NIM02715); and
  • a superannuation fund to which section 615(3) ICTA 1988 applies (exemption from tax for certain pensions paid to persons who are not resident in the United Kingdom – NIM02742)

Also, for NICs purposes only, the meaning of “EFRBS” does not include an employer-financed pension only scheme. NIM02790 - NIM02797 gives guidance on such schemes.


  • the meaning of:
    • “scheme” in section 393A, see EIM15020
    • “relevant benefits” in section 393B, see EIM15021 (point (2))


  • details of:
    • the Class 1 NICs position on:

a. an employer’s payment into an EFRBS, see NIM02757

b. a payment out of an EFRBS, see NIM02760 (contents)

  • the income tax position on:

c. an employer’s payment into an EFRBS, see EIM15040

d. a payment out of an EFRBS, see EIM15100 for cash benefits and EIM15120 for non-cash benefits. Note. The income tax position on a payment out of an EFRBS is substantially different to that for Class 1 NICs purposes.

  Words in bold are defined in the Glossary to the Registered Pension Schemes Manual (RPSM20000000). They have the same meaning for NICs purposes unless otherwise stated.