RPSM03101080 - Technical Pages: Protecting pension rights from tax charges: Valuing pension rights at 5 April 2006: Uncrystallised rights - cash balance arrangements

Uncrystallised pension rights: cash balance arrangements

The value of an individual’s uncrystallised rights under a cash balance arrangement on 5 April 2006 is the amount that would be available for the provision of immediate benefit had the individual been entitled to receive it on 5 April 2006, subject to two valuation assumptions.

The two valuation assumptions are that

1. the benefit should be calculated assuming the individual to be aged 60, unless a different age was specified under the arrangement on 10th December 2003 as the age at which no reduction would apply to the payment of an immediate benefit, in which case the individual should be assumed to be that age. Where the individual has already reached 60 or the age specified under the arrangement on 10 December 2003, the individual’s actual age on 5 April 2006 should be used when valuing the pension rights; and
   
   
2. the individual is deemed to be in good physical and mental health on 5 April 2006.