Any pipe needs proper bedding and inparticular PVC. In order for pvc to maintain the circular cross section, you must have excellent bedding and be mindful of compaction to the sides of the pipe, not just above and below. I mention this because you do not want compaction to force the new line down on top of the rigid existing line and cause failure.

Also, you cannot be very much above the exisiting pipe without the elevation of the new causing problems with the associated flattening out of the service laterals that will need to be reconnected to it. IF there are no service laterals that connect to the pipeline itself and all connections are made at manholes and all connections are above the elevation of the new pipe that you propose then the new elevation is not itself an issue. IF you must be very close to the existing, then the future failure of that line will cause a subsiquent failure to your new line. If you abandon in place the existing, do not plug and cap it at the manholes as you stated. Fill it with flowable fill to prevent future failures carrying away your new bedding and/or inducing a cave-in which will also cause damage to your new system. If you are going to be close to the existing in elevation REMOVE IT AND REPLACE IT and do a complete job. I believe that you find the cost is not that much different in the short term and will be far less in the long run, also elliminated are the headaches and future problems that this will cause go away. Another alternative is to have your contractor crush the old pipe inplace with his exxcavator and apply flowable fill directly to fill voids and prevent futre settlements

Lastly why are you upsizing and yet wanting to go shallower? going from 8 to 12 implies and increase of more than double the existing line capacity, as well and a lower coefficent of Friction. Has development doubled the load or is the new line to cover a larger service area. If a larger area, won't you need the depth inorder to extend the line and account for slope?