Defined benefits arrangement meaning

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...

This Checklist offers an overview of the information an annual benefit statement must contain under regs 16, 16A and 17 of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013, SI 2013/2734 (the Disclosure Regs 2013). It applies irrespective of whether the pension arrangement in question is a defined benefit scheme, a cash balance arrangement or any other money purchase set‑up. Benefit statements for benefits other than money purchase benefits Active, deferred and pension credit members who are entitled to benefits other than money purchase benefits (for example, final salary or career average benefits) may ask the trustees or managers of the scheme for a benefit statement once in every 12‑month period. The trustees must provide the statement as soon as practicable and, in any event, within two months of their request. The precise content of the annual benefit statement varies according to the member’s status, and the accompanying table identifies the information requirements for benefit statements for each relevant type of member...

Original news Mr Y (CAS-39869-Q8J7)—19 December 2023 Summary The Pensions Ombudsman (PO) has partly upheld a complaint concerning the recovery of a mistaken payment. The trustee acted contrary to section 91(6) of the Pensions Act 1995 by deducting the overpayment without first obtaining a court order; for these purposes, the Pensions Ombudsman is not a competent court. There was, however, no successful estoppel or change of position defence, as the complainant ought reasonably to have realised he was not due an unreduced pension at age 60. This decision serves as a reminder that, where repayment is contested, trustees must secure a court order before reclaiming overpayments... What were the facts? Mr Y was a member of the Aecom Group Pension Scheme (the Scheme). Before that, he had belonged to the Knight Piesold UK Final Salary Scheme (the KP Scheme), and subsequently moved his benefits to his employer’s defined contribution arrangement (the COMP Scheme). In 1998, Mr Y accepted his employer’s offer—an initiative in which he was...

The FCA launched a consultation on 8 August 2024 setting out proposals for a new value for money (VFM) framework, enabling pension providers to judge their schemes against measures such as investment performance, quality of service and costs. Sarah Pritchard, an executive director at the FCA, highlighted that Sixteen million people save for retirement through defined contribution pension schemes and stressed the need to prioritise long-term value rather than simply costs and charges. Developed by the FCA with the Department for Work and Pensions (DWP) and the Pensions Regulator (TPR), the framework introduces a publicly available colour system that grades investment design in retirement savings plans as red, amber or green. A red assessment would show a provider’s investment arrangement gives poor value for money; an amber grade would indicate the arrangement offers acceptable value but has scope to improve; and a green rating would confirm the arrangement provides good value for money...

George Mantides Ltd v Revenue and Customs Commissioners [2025] UKUT 124 (TCC) The Upper Tribunal endorsed His Majesty's Revenue and Customs' (HMRC) view that locum doctor George Mantides was, in reality, an employee of the Royal Berkshire Hospital (RBH), emphasising important contrasts with his separate engagement at Medway Maritime Hospital (MMH). Tribunal Judges Thomas Scott and Jonathan Cannan reasoned that, whereas the MMH terms would have included a narrowly defined right to substitution, the RBH arrangement called for Mr Mantides' own services and offered no substitution right at all. On that footing, the tribunal determined there was a sufficient framework of control for the RBH engagement to be characterised as a contract of employment...

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...

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...

This Practice Note outlines and critiques the restrictions that arise when advice is provided to an individual who wishes to move from a defined benefit (DB) occupational pension scheme to a manner of defined contribution (DC) arrangement. It concentrates on what amounts to suitable independent advice, identifies which persons are authorised to deliver advice, and explains the Financial Conduct Authority (FCA) requirements placed upon those persons. The need to take advice Since 6 April 2015, members holding safeguarded benefits—broadly, DB entitlements—valued at £30,000 or more must obtain advice from a professional, independent financial adviser (described by the FCA as a Pension Transfer Specialist) if they intend to surrender safeguarded benefits in favour of flexible benefits—broadly, DC entitlements—whether by transferring them to a flexible benefit scheme, converting benefits into flexible benefits, or receiving them as an uncrystallised funds pension lump sum. This duty to seek advice, which this Practice Note terms the ‘appropriate independent advice requirement’, is considered in Practice Note: Requirement for appropriate independent advice on DB to...

Name: ________________________________ Date of Birth: ________________________________ Membership Number: __________________ National Insurance Number: ____________________ Company Name: ________________________ Address: ____________________________________ Date Joined Scheme: ___________________ Date of Leaving: ____________________________ To the Trustees of the [ insert name of scheme ] Pension Scheme (the ‘Scheme’). I have benefits within the Scheme and apply to move the value of those benefits from the Scheme as outlined below. This also covers any amounts that would be paid from the Scheme to my dependants or beneficiaries if I were to die. I confirm I have received a statement of entitlement for my Scheme benefits showing the cash equivalent transfer value (CETV) as at my guarantee date. I wish to transfer my benefits to the Receiving Arrangement(s) listed here: Name of Receiving Arrangement: ________________________________ Address of Receiving Arrangement: ________________________________ HMRC Registration Number: ________________________________ DECLARATIONS Decision to transfer out • The choice to transfer my benefits to the Receiving Arrangement is mine alone,...

For the purposes of this Q&A, we proceed on the basis that, by this stage, the employee’s salary has either been paused or reduced. A contract of employment may set out express terms granting the employee a right to be paid, and to receive contractual benefits, during any spell of sickness absence. In some situations there may even be an implied term requiring the employer to both pay and to provide contractual benefits while the employee is off sick. As regards express provisions, an employer is not obliged to accept any such express contractual terms. Where the employer does agree, the employment contract will usually specify how long any sick pay entitlement lasts, the rate at which sick pay will be paid, and whether the employee will continue to receive contractual benefits during a period of sickness absence. For instance, an employer might agree to pay sick pay at the full rate for a defined period of absence—perhaps the first three or six months of sickness absence—then at half rate...