Defined benefits scheme 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...

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...

Statutory right to cash equivalent Individuals in defined benefit workplace pension schemes have a legal entitlement to transfer the cash equivalent of their scheme benefits to certain other pension arrangements. From 30 November 2021, using this right requires meeting one of two conditions set out in the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, SI 2021/1237, designed to protect members from fraudulent schemes. The stated cash equivalent is guaranteed for a three‑month period. This statutory entitlement takes precedence over any conflicting terms in the scheme’s trust deed and rules. The right applies where a member’s pensionable service has ended at least one year before normal pension age and the member has accrued rights under the scheme. Members who continue in service after pensionable service ends only acquire a...

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? ...

In this issue: Funding and investment Types of private pension schemes Scheme amendments The Pensions Ombudsman Daily and weekly news alerts Dates for your diary Trackers Funding and investment Final draft DB funding code of practice laid before Parliament on 18 July 2024 After a lengthy wait and anticipation, on 26 July 2024 the Pensions Regulator (TPR) finally released the final draft of the eagerly awaited defined benefit (DB) funding code of practice (the DB funding code), which will apply to scheme valuations with effective dates on or after 22 September 2024, supplanting the code. The final draft DB funding code was placed before Parliament on 18 July 2024 and is intended to mirror the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, SI 2024/462 (the Funding and Investment Strategy Regulations 2024), which took effect on 6 April 2024 and, as with the DB funding code, applies to valuations with effective dates on...

Funding, surplus and investment Government urged to amend Pension Scheme Bill’s reserve powers to allow pension funds access to private markets through investment trusts On 25 July 2025, the Association of Investment Companies (AIC) published a press note and an accompanying letter, dated 22 July 2025, to Torsten Bell, Minister for Pensions, urging changes to the current Pension Schemes Bill mandation provisions. The AIC asked the government to enable pension funds to invest in private assets via investment companies, also known as investment trusts, which are presently outside the scope of the Bill’s proposed reserve powers. As drafted, the Bill would grant the government reserve powers to require defined contribution (DC) schemes to allocate a share of their assets to UK private investments. However, the AIC argues that, in its current form, the legislation would stop DC schemes from meeting any mandation where investment trusts are used, as they are excluded from the permitted range of assets for pension schemes, despite their considerable role in financing UK growth...

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...

The Pensions Regulator’s scheme management enforcement strategy explains its approach to compliance and enforcement across defined benefits funding, defined contribution and public service pension schemes, while also describing the outcomes TPR may pursue and the means by which it could achieve them, all to strengthen safety and security for pension savers. Its prosecution policy and broader enforcement strategy set out the principal aims of its enforcement activity and give insight into the framework TPR applies when deciding which cases to take forward for enforcement action. Initial considerations in TPR investigations In its capacity as the UK regulator for work-based pension schemes, TPR has a suite of information-gathering powers to identify and track risks and to obtain evidence to support criminal prosecutions. These include: requiring reports of breaches of the law and notifiable events requiring reports prepared by skilled persons on specified issues compelling trustees and employers to provide documents and other information the power to inspect premises For more...

Practice Note for UK defined benefit (DB) occupational pension schemes This Practice Note is archived and is not maintained. It reviews the Pensions Regulator’s approach to funding defined benefit pension schemes for valuations with an effective date before 22 September 2024, in line with the Code of Practice on funding defined benefits dated 29 July 2014, alongside the relevant annual funding statements. It also summarises the Pensions Regulator’s approach prior to July 2014. For information on the Pensions Regulator’s approach for scheme valuations with an effective date on or after 22 September 2024, see Practice Notes: DB pensions funding reforms 2024 and The scheme-specific funding regime. When considering scheme funding issues, trustees and employers should take into account the Pensions Regulator’s approach to funding defined benefits (DB benefits). How would the Pension Regulator communicate its approach to DB scheme funding? The Pensions Regulator’s position in relation to DB scheme funding was mainly conveyed through the following documents: a code of practice on funding defined...

1 Definitions Insert defined terms into the Share Purchase Agreement, including: Accounts Date; Business Day; Buyer; CA 2006; Company; Completion; Completion Date; Conditions; Contractor; Disclosure Letter; Employee; Employment Legislation; former; holding company; Sale Shares; Seller; Subsidiaries and subsidiary; TULRCA; TUPE; Warranties; and Worker... 2 Employment Directors: Listed in the Disclosure Letter; no others held out. Employees, Workers and Contractors: The Disclosure Letter gives anonymised terms, benefits, scheme eligibility and absences; contracts and policies annexed; work is exclusive; no return rights, pending offers, restrictive obligations, post‑Accounts Date changes, promised increases, or flexible requests; no hybrid arrangements offered or under negotiation. Termination: All roles terminable on three months or less without extra liability; no notices; Completion creates no rights or payments; no contractual redundancy scheme. Liabilities and payments: No termination payments promised; no contingent liabilities; consultation duties complied with; only routine pay, expenses and holiday due. Disputes and disciplinary: No EHRC enquiries, union disputes, claims, live disciplinary/capability/grievance cases, or unanswered Equality Act questions....

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,...