Funded Unapproved Retirement Benefit Scheme (FURBS)
Funded Unapproved Retirement Benefit Schemes (FURBS) were introduced to provide benefits for pension scheme members with earnings above the salary cap. Since 6 April 2006, Pension Simplification has replaced the concept of a maximum salary for tax approved pension benefits with a Lifetime Allowance. It is therefore highly unlikely that any new FURBS will now be established.
They were set up under trust, as an individual arrangement between the employee and the employer. The employer acted as the trustee.
Contributions do not attract tax relief. However, there is no limit to the benefits payable, and if required, the entire fund accumulated prior to 6 April 2006 can be taken on retirement as a tax-free lump sum.
The HM Revenue's preferred term for a FURBS is now an Employer-Financed Retirement Benefits Scheme (EFRBS).
- Do the benefits under my FURBS built up prior to 6 April 2006 count toward my lifetime allowance?
No these benefits will not count towards your lifetime allowance.
- Will I still be able to take the entire fund as a tax-free lump sum in the future?
Yes. Assuming you were taxed on pre-A Day employer contributions and no further contributions have been paid since 6 April 2006, you will still be able take all the fund as a tax free lump-sum.
- Should I continue to pay contributions to my FURBS?
There is now little point as the benefit arising from the post-6 April 2006 contributions will be taxable.
Q & As
