Pensions Update No 112 issued on 18 December 2001, concerns TFC certification for transfers from buy-out contracts and assigned policies. Formerly, Revenue examiners had given explicit permission, pro tem, for PN 10.34 to be applied so that in calculating TFC, the benefits could be rolled up to the NRD set under the policy (which could be as late as 75) at 3% pa compound. Transferring to a PP via a s.32 thus provided a useful way of increasing the TFC available. This loophole has now been closed with immediate effect, so that roll-up is limited to the NRD under the original ceding scheme. The relevant PN 10.34 has been re-written, adding two whole pages to IR 12 in the process.

A number of other PNs have also been amended, including 10.49, 10.50, and those listed or referred to in Pensions Update No 111, issued on the same date - which are almost all minor corrections and/or update PNs in line with previously announced changes of practice.

Also published on 18 December, Pensions Update No 110 amends the PN definitions of remuneration and final remuneration to include provisions relating to

1. paid maternity leave;
2. Share Incentive Plans (formerly known as All-Employee Share Ownership Plans); and
3. restrictive undertakings (eg where an employee leaving service receives money in return for agreeing not to work for a competitor).

The calculation of FR for an employee who leaves pensionable service during a period of paid maternity leave (or within 12 months of returning to work afterwards), may now include a notional amount of remuneration. This is based on the greater of the remuneration the woman would have been entitled to, had she not gone on leave, and actual remuneration in the 12 months prior to going on leave (increased in line with NAE for the subsequent period to the end of the leave).

Amounts (of up to £125 per month, or 10% of gross salary if less) deducted from salary to buy Partnership Shares in a Share Incentive Plan can be included in remuneration (for reckoning maximum contribution entitlement) and final remuneration.

Amounts paid for restrictive undertakings cannot count for remuneration or final remuneration.