Money purchase benefits meaning

THIS CHECKLIST APPLIES TO TRUSTEES OF PRIVATE SECTOR DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES This Checklist has been archived. It summarises the actions DB trustees needed to take in the run-up to 6 April 2015, and afterwards, to accommodate the pension flexibilities (also called pension freedoms) introduced on 6 April 2015. For more about the nature of those reforms, see Practice Note: Pension freedoms—an introduction [Archived]. In this Checklist, ‘DB trustees’ denotes the trustees (or managers) of arrangements other than those providing flexible benefits, i.e. excluding: money purchase arrangements cash balance arrangements other arrangements that typically require an individual to buy an annuity Note that the additional voluntary contribution (AVC) facilities of defined benefit schemes do, in effect, amount to arrangements offering flexibilities. The issues set out in Pension flexibilities: steps for DC trustees to take—checklist [Archived] are therefore relevant to trustees of such schemes, but only to the extent that the AVC facilities are concerned. Preliminary steps ...

THIS CHECKLIST APPLIES TO TRUSTEES OF DEFINED CONTRIBUTION (DC) OCCUPATIONAL PENSION SCHEMES This Checklist has now been archived. It sets out the actions DC trustees were required to undertake both before and after 6 April 2015, concerning the pension flexibilities/pension freedoms that came into effect on 6 April 2015. For further detail on the scope and nature of those reforms, refer to Practice Note: Pension freedoms—an introduction [Archived]. Within this Checklist, 'DC trustees' refers to trustees (or managers) of pension arrangements providing flexible benefits, ie: money purchase arrangements cash balance arrangements other arrangements which typically require an individual to purchase an annuity Step 1—preliminary steps familiarise yourself with the pension flexibilities in detail...

This Checklist This Checklist outlines several principal steps that schemes must undertake with effect from 24 July 2014 to meet the requirements of section 29 of the Pensions Act 2011 (“section 29”). That provision revises the meaning of money purchase benefits in section 181 of the Pension Schemes Act 1993, with the effect that some categories of benefit cease to be money purchase. For further detail on the impact of the updated statutory definition of money purchase benefits on schemes, refer to Practice Note: Money purchase benefits—the transitional regulations [Archived]...

In this issue: The Pensions Regulator Members and benefits Public sector pensions Daily and weekly news alerts Dates for your diary Trackers The Pensions Regulator TPR strengthens anti-fraud initiatives to combat pension scams In a new blog post, The Pensions Regulator (TPR) details upgrades to its anti-scam work, prioritising richer intelligence gathering and closer cross-agency cooperation. Through the multi-million-pound ScamSmart campaign with the Financial Conduct Authority (FCA), and creative moves such as the pension-scam storyline on BBC’s EastEnders, TPR has warned millions of savers about scam risks. Its Pledge to combat pension scams has likewise raised industry expectations, with schemes covering millions of members committing to stronger prevention steps. In concert with partners, TPR’s anti-fraud efforts span prevention, disruption and sanctions, underpinned by stronger legislation, the dismantling of fraudulent business models, prosecution of offenders, seizure of assets and the barring of trustees. By sharpening the national intelligence picture, TPR supports sound policy-making and swift, cost-effective action. To...

In this issue: Probate UK taxation for private clients Budget and Finance Bill developments HMRC Manual updates Tax avoidance, evasion and non-compliance Private client regulatory compliance Charity and philanthropy Disputed trusts and estates Pensions, insurance and tax-efficient investments Scotland, Wales and Northern Ireland Question of the week Daily and weekly alerts LexTalk® Private Client: a Lexis+® community Fresh and revised content Dates for your diary Trackers Latest Q&As Useful information Probate Court and Public Guardian Fees (Miscellaneous Amendments) Order 2025 SI 2025/1126: This Order raises the fees for applications to register Lasting Powers of Attorney (LPA) and Enduring Powers of Attorney (EPA), together with the reduced charge for repeat LPA registration at the Office of the Public Guardian (OPG), and also the fees for obtaining copies of probate grants. The increases are intended to align the charges more closely with their estimated cost. It comes into...

In this issue: Collective defined contribution (CDC) schemes Transfers Investment and funding Pension benefits The Pensions Regulator Dates for your diary Trackers Collective defined contribution (CDC) schemes Regulations laid before Parliament to extend CDC schemes to unconnected multiple employers The Department for Work and Pensions (DWP) has issued its reply to the consultation on the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025. Concurrently, the draft regulations—expanding the CDC framework to ‘unconnected multiple employer’ arrangements, i.e. those not set up by a single employer or a group of connected employers—have been placed before Parliament. Subject to parliamentary approval, they are expected to take effect on 31 July 2026. The government reports widespread backing for the draft rules and has adjusted them to reflect stakeholder feedback, including dropping the ongoing requirement for scheme proprietors to sign off viability reports and revising provisions on actuarial equivalence testing. The...

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 PRACTICE NOTE APPLIES TO MONEY PURCHASE ARRANGEMENTS FROM 6 APRIL 2015 From 6 April 2015, new pension flexibilities expanded the retirement choices for DC members and others with ‘flexible benefits’ (in essence, money purchase and/or cash balance entitlements). As part of those reforms, drawdown became more broadly accessible. For background on the changes implemented on 6 April 2015, see Practice Note: Pension freedoms—an introduction [Archived]. This Practice Note concentrates on the legal framework for drawdown arrangements set up on and after 6 April 2015. It also addresses how pre-April 2015 drawdown is treated from that date. For the rules governing drawdown before 6 April 2015, see Practice Note: Drawdown between 6 April 2011 and 5 April 2015 [Archived]. What is drawdown? The label ‘drawdown pension’ (often called ‘flexible income’) replaced ‘unsecured pension’ and ‘alternatively secured pension’ used up to 5 April 2011. Drawdown pension describes the method of paying benefits that allows members to set their own yearly income from a pension arrangement...

What is an assessment period? When a qualifying insolvency event affects the sponsoring employer of an eligible scheme, the scheme moves into a Pension Protection Fund (PPF) assessment period as a result of that event. This arises on the occurrence of that event. The day on which that period starts is known as the ‘assessment date’ for the scheme. Since 3 January 2012, the assessment period is no longer required to last for at least 12 months. Throughout the assessment period, the PPF considers whether the scheme satisfies the requirements for entry into the PPF. In particular, the PPF will appoint an actuary to carry out a valuation of the scheme as at the assessment date, in order to determine whether the scheme’s assets are less than the protected liabilities—broadly, the benefits the PPF would pay to members if the scheme were to enter the PPF...