RPSM09104405 - Technical Pages: Member benefits: Lump sums: Pension commencement lump sum: Maximum amount: The applicable amount: Entitlement to a scheme pension under a money purchase arrangement

The applicable amount for an arising entitlement to a scheme pension

Where the member becomes entitled to a scheme pension under a money purchase arrangement, the applicable amount is one third of ‘the scheme pension purchase price’.

‘The scheme pension purchase price’ is the aggregate of

• the amount of such of the sums held for the purposes of the pension scheme, and
• the market value of such of the assets held for the purpose of the pension scheme,

as are applied in (or in connection with) the purchase or provision of the scheme pension and any ‘related dependants’ scheme pension’.

A ‘related dependants’ scheme pension’ is related to a scheme pension payable to a member of a registered pension scheme if

• the day on which one is purchased or sums or assets are applied for its provision is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased or sums or assets are applied for its provision, and
• the dependants’ pension scheme will be payable to a dependant of the member.