RPSM03103030 - Technical Pages: Protecting pre 6/4/06 pension rights from tax charges: Pension debits: Enhanced protection

Pension debits and enhanced protection

Whether or not an individual with enhanced protection can rebuild their pension rights after they have been reduced due to a pension debit depends on the type of the individual’s arrangements.

Other money purchase arrangements

An other money purchase arrangement is a money purchase arrangement that does not provide cash balance benefits. Contributions paid to an other money purchase arrangement after 5 April 2006 will cause loss of enhanced protection - see RPSM03104510. It will not be possible to rebuild pension benefits following a pension debit under this type of arrangement.

Defined benefits or cash balance arrangements

Where pension rights under a defined benefits or cash balance arrangement are reduced due to a pension debit it may be possible to rebuild pension rights under that arrangement. This is subject to the benefits crystallising from the arrangement being no more than the appropriate limit. If the rebuilding of pension rights results in relevant benefit accrual enhanced protection will be lost. RPSM03104520 to RPSM03104610 explain how relevant benefit accrual for cash balance and defined benefits arrangements works.