NIM02781 - Class 1 NICs: earnings of employees and office holders: retirement benefits schemes from 6 April 2006: employer-financed retirement benefits schemes: payments from such schemes: authorised member payments flowchart: pensions
You must read this page in conjunction with NIM02780 (first considerations).
Payment out of the EFRBS is a Pension.
Step 1
If the scheme had been a registered pension scheme, would the payment satisfy pension rules:
1 and 3, and
Yes Go to step 2
No Go to step4
Step 2
Is the pension payable until the employee’s death at least once a year?
Yes Go to step 3
No Go to step 4
Step 3
Payment can be disregarded in the calculation of earnings. See NIM14510 for Class 1A position.
Step 4
Payment cannot be disregarded in the calculation of earnings.