Equivalent pension benefit meaning

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...

Summary The Deputy Pensions Ombudsman dismissed a complaint concerning entitlement to benefits. The Scheme had paid a contributions equivalent premium for one spell of employment, and it was implausible that a refund of the member’s contributions was not processed at the same time. Regarding a different employment period, there was no proof that the complainant was an active participant in the Scheme; this was consistent with him paying standard National Insurance contributions rather than the reduced rate ordinarily associated with membership of a contracted-out arrangement. The decision serves as a reminder that the burden rests with the individual to evidence scheme membership. What were the facts? Mr Y was a member of the NHS Pension Scheme (the Scheme). The Scheme was operated on a contracted-out basis...

Masters v HMRC [2025] UKFTT 967 (TC) Employed in the UK by Tesco, Mr Masters had joined Tesco PLC’s defined benefit Pension Scheme back in 1983. In April 2016, he arranged for the cash equivalent value of his defined benefit rights—just shy of £6m—to be transferred into a UK SIPP vehicle. He relocated to Portugal in March 2019 and, from the 2019–20 tax year onwards, was treated as non‑UK tax resident. While living in Portugal he was taxed under the Non‑Habitual Resident regime, benefitting from exemptions on foreign‑source income, which encompassed withdrawals of £3.5m from his SIPP. Nevertheless, those withdrawals were taxed at source in the UK, resulting in £1.5m of tax being paid. HMRC then operated a PAYE tax code on the SIPP pension; Mr Masters sought instead the issue of an NT (no tax) code. In July 2020, he filed his UK self‑assessment income tax return for 2019–20, claiming a repayment of the tax deducted from the SIPP withdrawals, on the footing that the income was not...

THIS PRACTICE NOTE APPLIES IN RELATION TO DEFINED BENEFIT LIABILITIES How defined benefit (DB) liabilities ought to be assessed depends on a number of factors, in particular: the valuation approach to be adopted. Common exercises undertaken comprise the following: scheme-specific funding valuations as required under Part 3 of the Pensions Act 2004 (PeA 2004) solvency (or buy-out) valuations as required by the Occupational Pension Scheme (Scheme Funding) Regulations 2005, SI 2005/337, reg 7 valuations required by the PeA 2004, ss 143 and 179 (often described respectively as s 143 valuations and s 179 valuations) neutral estimates to meet the requirements of Technical Actuarial Standard 300 (Pensions) cash equivalent transfer values (CETV) as specified under the Occupational Pension Schemes (Transfer Values) Regulations 1996, SI 1996/1847 IAS19 and UK GAAP valuations whether the liabilities under review concern past service or future service, as distinct categories This Practice Note sets...

THIS PRACTICE NOTE APPLIES TO REGISTERED OCCUPATIONAL PENSION SCHEMES Given the intricacies of contemporary pensions law and scheme administration, it is little surprise that trustees of occupational pension schemes typically engage professional advisers to help them discharge their responsibilities. In addition, trustees of most registered arrangements are under a legal duty to appoint specified professional advisers, though certain schemes are excluded from these duties, depending on the character of the relevant pension scheme. For more information, see Appointing pension professional advisers and other service providers. Types of professional advisers Professionals commonly engaged in connection with (defined benefit) occupational pension schemes include: scheme auditor scheme actuary fund manager custodian of assets legal adviser Strictly, there is no statutory obligation on trustees of registered pension schemes to appoint legal advisers; however, where any individual is appointed as a legal adviser by someone other than the trustees and the trustees rely on that person’s skill or judgement, the trustees may...

FORTHCOMING DEVELOPMENT : Section 10 of the Finance Act 2022 will lift the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028, with an exception for members of the firefighters, police and armed forces public service pension schemes. The Finance Act 2022 will also allow members of registered pension schemes to draw benefits before 57 if, on or before 4 November 2021, they: had an unqualified right to take benefits; or were engaged in a substantive transfer to a scheme offering an unqualified right to a protected pension age under 57 on or before 4 November 2021. To use this new 2028 protection, the scheme’s rules must have included, as at 11 February 2021, an unqualified right to take scheme benefits before age 57. For further information, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. This guide is primarily aimed at trainees, newly qualified lawyers and others who are new 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,...