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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: payments out of such schemes: authorised member payments: pensions

Paragraphs 8(b) and 10 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 164(a) and 165(1) of Finance Act 2004

NIM02765 explains that, subject to the satisfaction of other conditions, a paymentout of an employer-financed retirement benefits scheme is disregarded in the calculationof earnings if, had the scheme been a registered pension scheme (NIM02715), the payment would have been an authorisedmember payment of the type shown there. One of those types of payment is apension which would have satisfied the following conditions:

  • pension rules 1 and 3 (section 165(1)); and
  • pension rule 4 or 6 (same section); and
  • would be payable in instalments at least once a year until the employee’s death.

For details of pension rules:

                                                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.