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HMRC internal manual

Pensions Tax Manual

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HM Revenue & Customs
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Registration: essential principles: schemes that are automatically registered pension schemes

Glossary PTM000001
   

 

Schemes that automatically became registered pension schemes on 6 April 2006
Deferred annuity contracts (DACs)
Submitting information for automatically registered pension schemes

 

A pension scheme is automatically registered either because:

  • it was set up and tax ‘approved’ on 5 April 2006 and before 6 April 2006 didn’t opt out of being a registered scheme, or
  • it is a deferred annuity contract purchased on or after 6 April 2006 to secure benefits provided under a registered pension scheme.

Schemes that automatically became registered pension schemes on 6 April 2006

Paragraph 1 Schedule 36 Finance Act 2004

The following existing pension schemes automatically became registered pension schemes on 6 April 2006 unless they opted out of being a registered scheme before that date. PTM152000 provides guidance on who became the scheme administrator for these schemes on 6 April 2006.

Approved retirement benefit schemes

A retirement benefit scheme approved under Chapter 1 of Part 14 Income and Corporation Taxes Act 1988 (commonly known as an approved occupational pension scheme). This includes Additional Voluntary Contribution (AVC) schemes.

Some pension schemes had split approval on 5 April 2006. This is where only part of the scheme was approved. Typically these were schemes for international employers where the section of the scheme for United Kingdom (UK) employees was approved and the section containing non-UK employees was not approved. For a split approved scheme, the part of the scheme that was treated as approved is automatically treated as registered from 6 April 2006 onwards. The other part(s) are not registered pension schemes.

Approved personal pension schemes

A scheme approved under Chapter 4 of Part 14 Income and Corporation Taxes Act 1988. These include stakeholder pension schemes (SHPs) and group personal pension schemes (GPPs).

Retirement annuity contracts

A retirement annuity contract, or retirement annuity trust scheme, approved before 1 July 1988 under Chapter 3 of Part 14 Income and Corporation Taxes Act 1988. Policyholders are still able to contribute to these arrangements. This includes contracts approved under the same Chapter 3 that provide only a lump sum payment on the death of the member before age 75.

Relevant statutory schemes

A pension scheme that was either a relevant statutory scheme (as defined by section 611A Income and Corporation Taxes Act 1988) or was treated by HMRC as if it was a relevant statutory scheme. Examples include schemes such as those for employees of the NHS, civil service, police, fire, armed forces, and teachers.

Parliamentary pension schemes or funds

A scheme or fund mentioned in section 613(4)(b) to (d) of Income and Corporation Taxes Act 1988. This includes the following schemes:

  • the Parliamentary Contributory Pension Fund
  • any scheme for members of the Scottish Parliament
  • any scheme for members of the Welsh Assembly
  • any scheme for members of the Northern Ireland Assembly
  • the Members’ Contributory Pension (Northern Ireland) Fund
  • the Assembly Contributory Pension Fund.

Old code schemes

These are also known as former approved superannuation funds. They are schemes that were approved before 1970 as approved superannuation funds for the purpose of section 208 of Income and Corporation Taxes Act 1970, but have not been re-approved as “new code” occupational pension schemes under Chapter 1 of Part 14 Income and Corporation Taxes Act 1988. They have retained their former approved status if no contributions have been made to the scheme since 5 April 1980.

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Deferred annuity contracts (DACs)

A deferred annuity contract is a policy or contract bought from an insurance company using funds from a registered pension scheme or from one of the type of pre 6 April 2006 schemes listed above. It will provide an annuity to the member at some time in the future. It is therefore always a deferred annuity contract when purchased. A deferred annuity contract stands apart from the pension scheme from which it arose.

Such contracts are often referred to as:

  • ‘section 32 policies’ as a consequence of a provision in section 32 Finance Act 1981, which related to deferred annuity contracts, or
  • ‘buy out policies’ as the member’s benefit rights have been “bought out” of the registered pension scheme.

A member may transfer their benefit rights to an insurance company of their choice. A member’s benefits may be secured by the purchase of more than one policy, or from more than one insurance company.

A member’s pension rights could have been transferred into a section 32 contract or buyout policy (deferred annuity contract) if, for example:

  • the employer’s scheme of which they were a member has been wound up and no longer exists, and members’ benefits were transferred out of the scheme before completion of the winding-up, or
  • the member left service with the employer whose scheme they were a member of, exercised their right to transfer their benefit rights out of the scheme, and chose to transfer to a deferred annuity contract rather than another employer’s scheme, personal pension, or stakeholder pension.

Deferred annuity contracts automatically registered on 6 April 2006

Paragraph 1(1)(d) Schedule 36 Finance Act 2004

A policy or contract in existence on 5 April 2006 that wasn’t paying out benefits on that date purchased from the funds of:

  • an approved retirement benefit scheme
  • an old code scheme, or
  • a relevant statutory scheme

automatically became a registered pension scheme on 6 April 2006.

Deferred annuity contracts purchased on or after 6 April 2006

Section 153(8) Finance Act 2004

A deferred annuity contract purchased on or after 6 April 2006 using funds from a registered pension scheme to secure rights under that scheme becomes a registered pension scheme on the day that the contract is made. There is no need to apply for registration.

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Submitting information for automatically registered pension schemes

Occupational, personal pensions and public sector schemes

These pre 6 April 2006 schemes had records created on Pension Schemes Online. When first reporting information to HMRC the scheme administrator will need to find their scheme record and add themselves as scheme administrator for that scheme. The Guide to using the Online Service for scheme administrators tells you how to do this.

Deferred annuity contracts and retirement annuity contracts

There are no existing records for these types of schemes on Pension Schemes Online. When a scheme administrator first needs to report information to HMRC they will need to make a scheme administrator declaration in accordance with The Guide to using the Online Service for scheme administrators.

When the scheme administrator in relation to a deferred annuity contract set up on or after 6 April 2006 first submits information for the contract using Pension Schemes Online they will have to complete a scheme administrator declaration.