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Revenue clarifies position on surpluses and MFR

PSO Update No 50 issued on 21 December 1998 (received 14 January 1999)



The Update deals with the interaction between the Pension Scheme Surpluses (Valuation) Regulations 1987 and the Occupational Pension Schemes (Minimum Funding Requirement (MFR) and Actuarial Valuations) Regulations 1996.


The 1987 Regulations require any scheme to which they apply to put forward proposals to eliminate any excess surplus over 5%, but circumstances could arise where such proposals would result in the MFR funding basis falling below 100%.


The Update indicates that if the trustees of a scheme believe this applies they should provide the PSO with documentary evidence supporting the position. If the PSO is satisfied they will allow tax reliefs on the scheme&#39s investment income and capital gains to continue without restriction.



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It is stressed by the PSO that it is considered very unlikely that a scheme will find itself in this position.

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