RPSM09100240 - Technical Pages: Member
benefits: Overview: Types of arrangement: Money purchase
arrangement or defined benefits arrangement
Benefit rules: money purchase arrangement or defined benefits
arrangement
The legislation only draws a distinction
betweenmoney purchase arrangements and
defined benefits arrangements when dealing with
the rules governing the actual payment of benefits.
This is because
- a
cash balance arrangement is also a money purchase
arrangement, and once the benefits come into payment it is no
different from any other money purchase arrangement, and
- at the point the benefit rules come into
play, a
hybrid arrangement will be treated as a money
purchase arrangement or defined benefits arrangement, depending on
the benefit provision actually provided.
So at the point benefits come into payment or entitlement arise
under an
arrangement that arrangement will always be
treated as either a money purchase arrangement or a defined
benefits arrangement.
These differing benefit rules are explained in more detail on
RPSM09100310 and
RPSM09100320.
