Short service refund lump sums and protected rights

Wednesday, July 18, 2012

HMRC has issued draft regulations allowing short service refund lump sums to be paid by schemes whose rules prevent “protected rights” from being paid out.

Where those schemes have not amended their rules following the abolition of protected rights and can only make payments of part of the member’s rights, these refunds are currently unauthorised payments. The regulations are expected to take effect this summer, although no expected date is given. HMRC is suggesting that affected schemes consider delaying short service refunds until then or until they can amend their rules.

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