RPSM09100310 - Technical Pages: Member benefits: Overview: Authorised benefits: Types of authorised pension benefits

Types of authorised pension benefits payable to a member

The legislation only authorises a registered pension scheme to provide pension benefits to its members that comply with the pension rules. If a pension benefit does not comply with these rules any payment made will be an unauthorised member payment, and will be dealt with and taxed accordingly.

There are seven pension rules dealing with payment of pension benefits in the lifetime of a scheme member, and these prescribe the various ways a pension benefit may be paid.

The pension rules differentiate between registered pension schemes on the basis of whether they provide benefits on a money purchase or defined benefits basis. So some of the rules apply only to money purchase arrangements and some only to defined benefits arrangements. Only the first two pension rules apply to all arrangements no matter what type they are.

RPSM09100320 explains what form of pension benefits may be provided to the member from each type of arrangement.

Provision of a secured pension

A pension paid direct from the scheme (a scheme pension) or through the purchase of a lifetime annuity is collectively referred to in this Manual as a secured pension. This is because both these forms of pension must have some form of guarantee that they will be paid for the life of the member. It is not a phrase that appears in the legislation.

Each of the two forms of secured pension are bound by a different (albeit similar) set of rules. Secured pensions are dealt with from RPSM09101000 onwards.