RPSM09100320 - Technical Pages: Member benefits: Overview: Authorised benefits: Pension types that can be paid from a money purchase or a defined benefits arrangement

What pension benefits may be provided to a member by a money purchase arrangement and by a defined benefits arrangement

Money purchase arrangements

A money purchase arrangement may provide the member with a pension income in the following ways

• through the purchase of a lifetime annuity contract from an insurance company (see RPSM09101700),
• as a scheme pension (see RPSM09101200),
• if the member became entitled to their pension before 6 April 2011 through the provision of an unsecured pension (up to age 75 only), either provided direct from the scheme as income withdrawals or through the purchase of a short-term annuity contract, or a series of such contracts, from an insurance company (see RPSM09102000),
• if the member became entitled to their pension before 6 April 2011 through the provision of an alternatively secured pension (from age 75 only) direct from the scheme as income withdrawals (see RPSM09103000), or
• if the member became entitled to their pension on or after 6 April 2011 through the provision of a drawdown pension (see RPSM09103500).

The precise options available to a member will depend on the scheme rules.

A cash balance arrangement is also within the definition of a money purchase arrangement. So the above applies equally to such an arrangement.

Defined benefits arrangement

A defined benefits arrangement may only provide the member with a pension income as a scheme pension see (RPSM09101200).