Money purchase scheme meaning

When does a section 75 debt arise? An s 75 liability crystallises in respect of an occupational pension scheme that is underfunded on a buy-out basis and: an employment-cessation event happens for a relevant participating employer within a multi-employer scheme an insolvency event occurs in relation to a participating employer of the scheme, or the scheme formally goes into winding up In a multi-employer scheme, an employer’s s 75 debt is its allocated share of the scheme deficit, appropriately assessed on a buy-out basis. As an alternative to immediately paying the s 75 debt in full, an employer may enter into a deferred debt arrangement, an apportionment arrangement, or a withdrawal arrangement. Section 75 does not apply at all to money purchase schemes, unregistered pension schemes, unfunded public sector schemes, and a scheme with only one member. ...

THIS CHECKLIST APPLIES TO TRUSTEES OF DEFINED CONTRIBUTION (DC) OCCUPATIONAL PENSION SCHEMES This Checklist has now been archived.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 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...

In this issue: The Pensions Regulator The Pensions Ombudsman Disputes and litigation New content Daily and weekly news alerts Dates for your diary Trackers The Pensions Regulator DWP announces appointment of Kirstin Baker as interim chair of TPR The Department for Work and Pensions (DWP) has confirmed the appointment of Kirstin Baker as interim chair of the Pensions Regulator (TPR) from 1 August 2025, for a period of up to nine months. Baker, who is currently TPR’s Senior Independent Board Member, will replace Sarah Smart, whose tenure as chair has concluded, while the competition for the next full-term chair takes place. The interim chair brings substantial experience from prior roles at the Competition and Markets Authority (CMA) and HM Treasury, where she received a CBE for work during the banking crisis. In this interim capacity, the chair will receive annual remuneration of £73,840, aligned to a minimum time commitment of 104 days. For further information, see:...

A Court of Appeal bench unanimously dismissed Axis Specialty Europe SE’s attempt to overturn a decision requiring it to indemnify Discovery Land Co LLC under Jirehouse Partners LLP’s professional indemnity policy, after a firm partner misapplied funds set aside for the purchase and redevelopment of Taymouth Castle in the Scottish Highlands. Axis contended it could deny indemnity, firmly asserting that Jirehouse partner Vieoence Prentice knew fellow partner Stephen Jones was misusing the money at issue. The three-judge panel ultimately held that Prentice had not sanctioned the misconduct at all. In April 2023, High Court Judge Robin Knowles found against Axis, plainly stating he could not conclude Prentice appreciated what Jones was doing. Judge Knowles determined that had Prentice discovered Jones’s wrongdoing earlier, he would have quit before March 2019, when the scheme emerged in full and became undeniable. Jones defrauded Discovery Land. In 2018, the developer transferred US$14m to a client account at Jones’s firm, then a further US$9.3m to close the transaction, on the assurance from Jirehouse that...

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...

1 Definitions and interpretation 1.1 The terms below shall be interpreted as follows: Accumulation Period — with respect to Partnership Shares, the span during which the Trustee holds a Qualifying Employee’s Partnership Share Money before buying Partnership Shares or returning it to the employee; Acquisition Date — (a) for Partnership Shares where an Accumulation Period is in place, has the meaning given in paragraph 52(5) of Schedule 2; (b) for Partnership Shares where no Accumulation Period is in place, has the meaning given in paragraph 50(4) of Schedule 2; (c) for Dividend Shares, has the same meaning given by paragraph 66(4) of Schedule 2; Associated Company — has the same meaning as in paragraph 94 of Schedule 2; Award Date — in respect of Free Shares or Matching Shares, the date on which those Shares are granted; Award — (a) in respect of Free...