PSI25.1.3 - Flexibility in Pension Provision – Introduction - Schemes Providing Both Money Purchase And Defined Benefits

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

The annuity purchase deferral/income drawdown facility is not appropriate for use by defined benefit schemes because the level of benefit is specified in the scheme rules.

However, the facility may be offered by a scheme which provides separate money purchase (contracted in) and defined benefit elements, but only to the extent that one element is not underpinning the other. For example, a scheme which consists of two separate sections (one pure money purchase and the other pure defined benefits) or a scheme which provides defined benefits up to a particular date and money purchase benefits thereafter, will be able to offer these facilities.