Pension Contribution insurance (PCI) was there to pay into a pension if the member was too ill to work and it could be taken out by either the member or employer. This is something for pensions set up after 6^th April 2001

The payment made by the PCI is paid net, so tax relief is awarded but most PCI contracted limited the payment to £3,600 pa gross so the full tax relief could be claimed.

For pensions set up before 6^th April 2001, the insurance was called wavier of contribution. The contribution for the insurance are paid directly into the pension and in the event of a claim no further contributions would be paid during the claim period. Tax relief on these contributions stopped on 6^th April 2006.

The provider of the pension then undertakes a commitment to pay the value of the pension as if all the contributions had been made on retirement, transfer or death.