Employers which were quick to identify employees whose pension funds would exceed the new lifetime allowance when it was announced in 2002 are being encouraged to carry out a second review to ensure they have communicated with all affected employees.
The lifetime allowance limit, which has initially been set at £1.5m and will increase to £1.8m by 2010, came into effect on 6 April.
Unless individuals whose pension benefits exceed the lifetime allowance apply for enhanced protection by 5 April 2009, they will be liable for high tax charges of 55% on the amount exceeding the £1.5m limit.
Paul McGlone, principal and senior actuary at Aon Consulting, said it is possible that some employees who thought their pension fund would be under the lifetime allowance when it was originally announced in 2002 could now be over it.
"Due to the increase in the equity market, anyone with a substantial defined contribution fund could find that, while they didn't expect to be hit by the lifetime allowance, they now are. A £850,000 pension fund [for example][ would have increased, even without contributions, to over the lifetime allowance," he explained.