RPSM03301027 - Scheme Administrator Pages: Protecting pension rights from tax charges: Valuing pension rights: Uncrystallised rights

What are uncrystallised rights and how should they be valued?

Benefit rights are uncrystallised rights where the individual has not yet become entitled to the payment of benefits. Only rights from ‘relevant pension arrangements’ can be protected. The following are relevant pension arrangements.

1. A scheme approved under Chapter 1 Part 14 ICTA 1988 (an approved occupational pension scheme);
   
   
2. A scheme formerly approved under section 208 ICTA 1970 (an old code scheme);
   
   
3. A relevant statutory scheme (defined in section 611A ICTA 1988) or a scheme treated by HMRC as if it were a relevant statutory scheme;
   
   
4. An annuity contract relating to (a) to (c) above that does is not paying benefits on 5 April 2006 (a deferred annuity contract). This includes contracts that are in the name of the member;
   
   
5. A Parliamentary pension scheme or fund;
   
   
6. A retirement annuity contract; and
   
   
7. A scheme approved under Chapter 4 part 14 ICTA 1988 (approved personalpension schemes)

How uncrystallised rights are valued depends on the type of arrangement providing the benefits. The type of arrangement depends on what benefits will be paid. There are four types of arrangement.

Other money purchase arrangement – see RPSM03301040 on how to value uncrystallised rights

Cash balance arrangement – see RPSM03301050 on how to value these uncrystallised rights

Defined benefits arrangement – see RPSM03301030 on how to value uncrystallised rights

Hybrid arrangement – see RPSM03301060 on how to value these uncrystallised rights

RPSM03301028 gives more information on how each type of arrangement is defined.

Detailed technical guidance on the valuation of uncrystallised rights can be found at RPSM03101050 to RPSM03101610.