’protected rights’ were the benefits which schemes contracted-out on a money purchase basis had to provide, before 6 April 2012, to contracted-out members in lieu of the state benefits foregone as a consequence of contracting-out.

For more information on contracting-out, see Practice Note: What does ‘contracting-out’ mean for pension lawyers?

Contracting-out on a money purchase basis (or DC contracting out) first became possible in April 1988, but was abolished on 6 April 2012.

The abolition meant that, on and from 6 April 2012, it ceased to be possible to accrue protected rights and the statutory restrictions applicable to protected rights accrued before that date ceased to apply. In effect, this means that former protected rights can be treated as normal scheme benefits, save to the extent that the scheme rules provide otherwise.

For more information, see Practice Note: Abolition of DC contracting out.