The following Pensions guidance note Produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:
The question of the nature of money purchase benefits has attracted considerable attention over recent years. Given the onerous and growing financial burdens that defined benefit pension arrangements can impose on employers, the ability to identify clearly and unambiguously the nature of pension scheme benefits has become increasingly important. This is particularly so in the case of hybrid pension arrangements, which typically contain a variety of different types of benefits.
For further information on types of pension arrangements, see Practice Note: Types of pension arrangements for employees.
For most purposes, a benefit is a ‘money purchase benefit’ if it falls within the statutory definition of that term in the Pension Schemes Act 1993, s 181 (although, in some cases, an equivalent definition of the term is contained in another provision, eg in the Pensions Act 2008, s 99 in relation to auto-enrolment). Whether a benefit is money purchase in nature may affect the treatment of that benefit under pensions legislation in a number of circumstances eg in relation to:
the Pension Protection Fund (PPF), or
the distribution of assets on a scheme wind-up
Trustees should therefore ensure they consider carefully whether or not any scheme liabilities fall within the statutory definition, particularly in view of the government's narrowing of that definition with effect from 24 July 2014 (see The revised
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.