Michael Collins
Michael advises employers and trustees of occupational pension schemes on all aspects of pensions law as well as dealing with pensions issues on corporate transactions. He also provides legal advice to executive pension providers and other pension professionals.
Michael is well placed to advise on all pensions-related issues, having advised clients ranging from owner-managed businesses in relation to their executive pensions to the multi-billion-pound pension funds of major international companies, including putting in place contingent assets (such as parent company guarantees or charges over property) in order to improve the security of pension scheme benefits and reduce levies payable to the Pension Protection Fund.
Practice Area
Panel
- Contributing Author
Qualified Year
- 2000
Membership
- Association of Pension Lawyers
- National Association of Pension Funds (chair of the West Midlands group)
Education
- University of Birmingham: LLB
- De Montfort University: PGDLP
2 Contributions by Michael Collins
PRACTICE NOTES
Cash balance pension schemes: benefit designs, risk-sharing, money purchase definition changes, transitional provisions, scheme funding, PPF eligibility and compensation, revaluation, pension increases, and tax and annual allowance treatment
What is a cash balance scheme?
Put simply, a cash balance pension scheme is an arrangement where a member accumulates a guaranteed pot of money during their pensionable service, which is then used to provide retirement benefits. When the member retires, this pot is generally applied to buy an annuity (or to deliver other retirement benefits) on whatever terms can be obtained in the market at that time. This kind of scheme blends features of a defined benefit (DB) arrangement with aspects of a defined contribution (DC) arrangement. That mix is important because it influences how the risks inherent in any pension arrangement are shared between the member and the sponsoring employer, as explored in this Note.
Benefit structures
Cash balance schemes come in different forms, but they broadly fall into two categories depending on how the retirement cash sum is calculated:
the first is where the cash sum is determined by reference to the member’s service and their final salary at retirement (or the earlier date of leaving)...
Pensions
PRACTICE NOTES
UK Hybrid Occupational Pension Schemes: DB/DC Structures, Underpins, PPF, Employer Debt, Auto‑Enrolment, Governance and TPR Guidance
What is a hybrid pension scheme?
Current pensions law largely divides UK occupational pension schemes into two categories, based on whether they qualify as money purchase schemes. In outline:
a money purchase scheme is one where every benefit provided is a money purchase benefit (see Practice Note: Money purchase benefits—the statutory definition for the statutory meaning of “money purchase benefits”)
Defined benefit schemes are, generally, not separately defined. There are limited exceptions for automatic enrolment under the Pensions Act 2008 (PenA 2008) and for the types of benefits payable as authorised payments under the Finance Act 2004 (FA 2004), under which:
a defined benefits (DB) scheme is one where none of the benefits provided are money purchase benefits (note also the similar definition of a “defined benefits arrangement” in FA 2004, s 152(6))
For most purposes, these definitions therefore do not address situations where only some of a scheme’s benefits are money purchase. Schemes delivering a mixture of benefit types are commonly known as hybrid schemes. Two statutory definitions exist...
Pensions
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