Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Accrual definition

What does Accrual mean? In pensions practice, accrual describes the build‑up of a member’s pension over time, usually by reference to each year of pensionable service. It is a descriptive term used across pensions law and scheme rules rather than a single statutory definition, though related concepts such as accrued or subsisting rights are defined and protected. In a defined benefit scheme, accrual is determined by the scheme’s accrual rate (for example, 1/60th of pensionable salary for each year of service), with accrued benefits typically revalued up to retirement. In a defined contribution scheme, accrual refers to the growth of the member’s pot from contributions...

Closing DB occupational pension schemes to future accrual: employers’ legal routes, contract variation, trust and confidence, section 75 debt, consultation and auto‑enrolment compliance

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE APPLIES TO defined benefit OCCUPATIONAL PENSION SCHEMES

Numerous employers running defined benefit (DB) occupational pension schemes have opted to halt future accrual, substituting them with a defined contribution (DC) solution, often — though not invariably — by way of a group personal pension (GPP) arrangement.

At times, the impetus for such a shift follows the acquisition of the employer(s) by a new owner keen to curb future pension expenditure and/or to standardise pension provision across the corporate group that the relevant employer(s) has joined.

In other situations, the driver for change arises in the ordinary course of the employer(s)’ business operations and is typically propelled by cost pressures and affordability.

In any case, a proposal to close a DB scheme to future accrual will generally be regarded as a deterioration in the benefits package for the employees concerned...

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Wyn Derbyshire

gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also...

Web page updated on 21/05/2026

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