RPSM03104080 - Technical Pages: Protecting pension rights from tax charges: Enhanced protection: Cessation: Relevant benefit accrual

Cessation of enhanced protection - relevant benefit accrual

Whether ‘relevant benefit accrual’ occurs depends on the type of arrangement under which the individual’s benefits are being provided. There are different rules for

• Other money purchase arrangements, and
• Cash balance or defined benefits arrangements.

RPSM03104510 explains when ’relevant benefit accrual’ occurs in a money purchase arrangement that is an other money purchase arrangement. RPSM03104520 explains when relevant benefit accrual occurs in a defined benefits or cash balance arrangement.

Essentially the relevant benefit accrual test for other money purchase arrangements is an input test. So payment of benefits from this type of arrangement will not trigger loss of enhanced protection

The relevant benefit accrual test for defined benefits or cash balance arrangements is an output test. So contributions to these types of arrangement will not trigger loss of enhanced protection but the payment or transfer of benefits may cause loss of enhanced protection.