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).
Q & A's
No these benefits will not count towards your lifetime
allowance.
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.
There is now little point as the benefit arising from the post-6
April 2006 contributions will be taxable.
The Pensions Advisory Service has very little to do with
unapproved schemes. However HM Revenue and Customs publish
information and guidance on such schemes in the Employment Income Manual (EIM) found on their
webpage.
