Defined benefit meaning

Legislation safeguards the pension entitlements of members of occupational pension schemes and other employment‑related benefit arrangements, including workplace personal pension schemes that receive employer contributions, while they are away from work on statutory family leave. Statutory family leave encompasses: maternity leave paternity leave adoption leave parental leave shared parental leave parental bereavement leave carer’s leave Maternity leave Occupational pension schemes are taken to include a maternity equality rule requiring periods when a member is on maternity leave to be treated in the same manner as periods when they are not on maternity leave. This maternity equality rule applies to both paid and unpaid ordinary maternity leave (OML), as well as to paid additional maternity leave (AML). As a result, under this rule, time spent on OML and paid AML in a defined benefit (DB) scheme is recognised as pensionable service...

Pre-emption period Ensure the agreement specifies a defined period during which the buyer enjoys the benefit of the right of pre-emption, with that entitlement confined to the stated timeframe. Trigger event Consider whether the event that obliges the seller to offer the property to the buyer (often captured by the definition of ‘Disposal’) is drawn too broadly. For example, will granting a lease at a rack rent set off the pre-emption right? Many sellers regard such lettings as simple upkeep of their investment in the property. Also think about carving out from ‘Disposal’ (or the pre-emption trigger) a contract for sale of the property that is conditional upon the right of pre-emption being exhausted. This can assist a landowner when concluding a sale with a third party, particularly where it is plain that the buyer has no intention of exercising the option. Avoid phrasing the trigger as arising when the seller ‘proposes to dispose’ of the property, as that may merely invite a dispute about precisely when...

THIS CHECKLIST APPLIES TO OCCUPATIONAL PENSION SCHEMES This checklist highlights the key actions involved in bringing an occupational pension scheme to a close—whether a defined benefit (DB) or defined contribution (DC) arrangement—and aligns with winding-up guidance from the Pensions Regulator (TPR). For fuller detail on these steps, see Practice Notes: Winding up a defined benefit (DB) occupational pension scheme; Winding up a defined contribution (DC) occupational pension scheme; and Winding-up an occupational pension scheme—statutory disclosure from 6 April 2014, reporting and record-keeping requirements. Data cleansing and reconciling records Once trustees decide to wind up the scheme, they should carry out a thorough data cleansing exercise. As this can be lengthy, it should, where practicable, be completed before formal winding-up starts. Where trustees cannot control the timing of the wind-up, cleansing and planning should begin as early as possible within the winding-up process. As part of the data cleansing exercise, trustees should: Check and reconcile member records. Where the scheme is a former contracted-out...

What is the background to the call for evidence? Following Chancellor of the Exchequer Jeremy Hunt’s Mansion House address the night before, the DWP launched the call for evidence. Issued in tandem with several other DWP publications, these materials covered a broad spread of topics affecting UK pension schemes. Their shared aim was to boost investment in UK productive finance whilst shielding members’ benefits and giving precedence to a resilient, diversified gilt market. The Chancellor characterised the proposals across the various papers as the ‘Mansion House reforms’. The DWP placed the Response alongside further papers pertinent to DB pension schemes, including: the Autumn Statement 2023, which confirms that the Government will reduce the authorised surplus payments charge, currently payable on a return of surplus to a scheme employer, from 35% to 25% from 6 April 2024; and Call for evidence outcome: Pension trustee skills, capability and culture What was the outcome? ...

According to the APPT, at the very least there should be a statutory funding assessment and ultimate decision-making authority for managers of retirement savings schemes, as a minimum requirement. The association set out its view in response to a consultation on the Pension Schemes Bill, a landmark law for the industry, formally during the consultation process. On 1 September 2025 the Bill was sent to the parliamentary Public Bill Committee (PBC), which examines the small print of particular legislation. A fiercely debated element proposes that employers with comfortably funded defined benefit pensions could more readily ‘extract’ surplus assets that have accumulated beyond the amounts required to meet members’ benefits. The government believes such steps could help to stimulate economic growth...

ACA chair Stewart Hastie said the trade body backs the Labour government’s January 2025 proposal enabling companies that sponsor defined benefit pension arrangements to draw down substantial surpluses. He urged Pensions Minister Torsten Bell to deliver a pragmatic and successful new regime for defined benefit surplus release. Hastie stressed that pension trustees must remain central to the process, but that the necessary detail — including a new regulator code — should arrive sooner rather than later and underpin a practical approach if the behavioural shift sought is to be achieved...

The Pensions Regulator (the Regulator) The Regulator is an arm’s-length public body set up under the Pensions Act 2004 (PeA 2004). Its authority to impose contribution notices and financial support directions appears in PeA 2004, ss 38–50. Although the Act does not use the label, these provisions are widely known as the Regulator’s ‘moral hazard’ powers. Their purpose is to counter the ‘moral hazard’ arising from the Pension Protection Fund (PPF): the possibility that corporate groups might organise their structures so as to heighten exposure within their pension schemes, comfortable that the PPF would intervene if the employer entered insolvency. The principal moral hazard tools—and the only ones exercised so far—are the power to issue a contribution notice (CN) and the power to issue a financial support direction (FSD). A CN compels the recipient to pay a specified amount into a defined benefit occupational pension scheme. A CN can be issued where the criteria in PeA 2004, s 38 are satisfied. These mechanisms exist to deter behaviour that would...

A risk with employment cessation events is that they can be set off unintentionally, for example because the last remaining active member of an employer in a multi-employer defined benefit scheme has left. The Employer Debt Regulations, SI 2005/678 were amended with effect from 6 April 2008 to introduce grace periods, a device intended to help employers deal with accidental employment cessation events. For further information on employment cessation events and other section 75 triggers, see Practice Note: When is a section 75 debt triggered? When can a grace period be used? When can a grace period be used? An employer in a multi-employer defined benefit scheme may notify the trustees that it wishes to enter a grace period (by giving a grace period notice) if: that employer ceases to employ active members at a time when at least one other employer still employs active members, thereby creating an employment cessation event, and it intends to employ at least one individual who is an...

This Practice Note sets out the principal steps for properly bringing to an end a defined contribution (DC) occupational pension scheme—also described as a money purchase occupational pension arrangement or a trust-based defined contribution plan. Throughout this Practice Note, this type of arrangement is termed a ‘DC scheme’. The guidance applies across a range of DC schemes, including trusts that sit outside the authorised master trust framework and small self-administered pension schemes (SSASs), although the latter may, in certain cases, be excluded from particular statutory obligations or requirements. This Practice Note does not cover the winding-up of any: an ‘authorised master trust’ under the Pension Schemes Act 2017 (PSA 2017)—for further detailed information, please see Practice Note: The authorisation and supervisory regime for master trusts, contract-based DC arrangements (eg group personal pension arrangements)—for further details and guidance, see Practice Note: Winding up of personal pension schemes Statute makes distinct and specific provision for hybrid schemes (combining defined benefit (DB) and DC...

This AGREEMENT is dated [ date ] Parties [ insert name of Assignor ] [ of OR a company incorporated in [ England and Wales ] with number [ insert registered number ], whose registered office is at [ insert address ] ] (the Assignor); [ insert name of Assignee ] [ of OR a company incorporated in [ England and Wales ] with number [ insert registered number ], whose registered office is at [ insert address ] ] (the Assignee). Each of the Assignor and the Assignee is a party, and together the Assignor and the Assignee are the parties. Background This Agreement is supplemental to the Contract (as defined below). [ As part of an internal reorganisation of the Assignor’s group of companies OR As a result of [ insert relevant business background to the assignment ] ], the Assignor proposes to transfer and assign all of its rights, title, benefit and interest in...

date [ date ] Parties [ name of Assignor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Assignor) [ name of Assignee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Assignee) 1 Definitions In this Deed, the terms below shall be interpreted as follows: Contract - an agreement to sell and buy the Property dated [ date ], between [ name of the seller of the Property ] (as seller) and the Assignor (as buyer), a copy of which is included with this Deed in the Appendix; Property - [ is as [ defined OR described ] in the Contract OR the [ freehold OR leasehold ] property known as [ description ] ]...

This document offers general guidance on the probate process for non‑professional personal representatives and bereaved family members. Your probate practitioner can provide tailored advice specific to your circumstances. It is aimed at those administering estates without professional expertise and at families coping with a bereavement. It provides broad information, not case‑specific guidance. FORTHCOMING CHANGE relating to IHT on pension death benefits At the Autumn Budget 2024 on 30 October 2024, the government confirmed that, from 6 April 2027, unused pension pots and death benefits paid from a pension will be included in a person’s estate for IHT. The rule will cover both defined contribution and defined benefit arrangements, and apply to UK‑registered plans as well as qualifying non‑UK pension schemes. A technical consultation on how these reforms will operate runs from 30 October 2024 to 22 January 2025. For further details, see: Autumn Budget 2024—Private Client analysis — Inheritance tax. Coping with the death of someone close can bring significant emotional and practical hurdles. If you are...

Where a long residential lease is extended under section 56 of the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) and the freehold is subject to a Form N restriction in respect of a charge to the freeholder’s lenders, will the HM Land Registry require lender consent to be submitted in order for the lease extension to be registered notwithstanding that the lease extension is pursuant to statute? A restriction entered on the register indicates that the proprietor’s power to deal with the land is constrained in some manner. Its practical effect is either to bar registration of a disposition, or to oblige the applicant to satisfy specified requirements before registration can proceed, for example by producing evidence of consent from the person entitled to the benefit of the restriction. A restriction may apply to every disposition, or be confined to a defined class of disposition. It can prevent any entry from being made permanently, for a stated period, or until a stated...

This response considers whether there is a fixed period that a relationship needs to have lasted in order to fall within the definition of a relationship of ‘significant duration’ under section 62(3) of the Family Law Act 1996 (FLA 1996). A court may issue a non-molestation order under FLA 1996, s 42 where an application is brought by a person ‘associated with the respondent’. Equally, in any family proceedings to which the respondent is a party, the court can decide that such an order should be made for the benefit of any other party to the case or any relevant child, despite no application having been submitted (FLA 1996, s 42(2)). For more detailed guidance, see Practice Note: Non-molestation orders. The phrase ‘associated persons’ is defined in FLA 1996, s 62(3)...

We proceed on the basis that the pension scheme in question is a defined benefit scheme and that the former MND is a member. Whether the former MND should first contest the outcome of the MND election through the pension scheme’s internal dispute resolution procedure, or complain straight to the Pensions Regulator, depends on the nature and seriousness of the breach...