Pensions Act 1995 (c. 26)

Part I U.K. Occupational pensions

Modifications etc. (not altering text)

C1 Pt. I modified (6.4.1997) by The Personal and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 1997 (S.I. 1997/786), regs. 1, 2

C2 Pt. I applied (with modifications) (6.4.1997) by The Personal and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 1997 (S.I. 1997/786), reg. 2

C3 Pt. I: Pensions Act 2004 (c.35), Pt. 3 construed as one with Pt. I of this Act (4.12.2005 for specified purposes, 30.12.2005 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 233, 322(1) (with s. 313); S.I. 2005/3331, art. 2(1)(a)(b), Sch. Pt. 1

Indexation E+W+S

[F1 51ZB Meaning of “cash balance benefit” E+W+S

(1) For the purposes of section 51(7)(a), a pension provided to or in respect of a member of an occupational pension scheme is a “cash balance benefit” if conditions 1 and 2 are met.

(2) Condition 1 is that the rate of the pension is calculated by reference to a sum of money (“the available sum”) which is available under the scheme for the provision of benefits to or in respect of the member.

(3) Condition 2 is that under the scheme—

(a) there is a promise about the amount of the available sum, but

(b) there is no promise about the rate or amount of the benefits to be provided.

(4) The promise mentioned in subsection (3)(a) includes in particular a promise about the change in the value of, or the return from, payments made under the scheme by the member or by any other person in respect of the member.

(5) The promise mentioned in subsection (3)(b) includes a promise that—

(a) the amount of the available sum will be sufficient to provide benefits of a particular rate or amount;

(b) the rate or amount of a benefit will represent a particular proportion of the available sum.

(6) But a pension is not prevented from being a cash balance benefit merely because under the scheme there is a promise that—

(a) the rate or amount of a benefit payable in respect of a deceased member will be a particular proportion of the rate or amount of a benefit which was (or would have been) payable to the member;

(b) the amount of a lump sum payable to a member, or in respect of a deceased member, will represent a particular proportion of the available sum.]

Textual Amendments

F1 S. 51ZB inserted (3.1.2012) by Pensions Act 2011 (c. 19), ss. 21(4), 38(4); S.I. 2011/3034, art. 3(c)

Modifications etc. (not altering text)

C4 Ss. 51-54 modified (30.12.2005) by The Occupational Pension Schemes (Cross-border Activities) Regulations 2005 (S.I. 2005/3381), regs. 1, 14, Sch. 2 para. 3