PART 4Pensions flexibilities
CHAPTER 5Interpretation of Part 4
75Meaning of “cash balance benefit”
1
In this Part “cash balance benefit”, in relation to a member of a pension scheme or a survivor of a member, means a benefit calculated by reference to an amount available for the provision of benefits to or in respect of the member (“the available amount”) where there is a promise about that amount.
2
But a benefit is not a “cash balance benefit” if, under the scheme—
a
a pension may be provided from the available amount to or in respect of the member, and
b
there is a promise about the rate of that pension.
3
The promise mentioned in subsection (1) includes, in particular, a promise about the change in the value of, or the return from, payments made by the member or any other person in respect of the member.
4
The promise mentioned in subsection (2)(b) includes a promise that—
a
the available amount will be sufficient to provide a pension of a particular rate;
b
the rate of a pension will represent a particular proportion of the available amount.
5
A benefit is not excluded from the definition of “cash balance benefit” by subsection (2) merely because under the scheme there is a promise that—
a
the rate or amount of the benefit payable in respect of a deceased member will be a particular proportion of the rate or amount of the benefit which was (or would have been) payable to the member, or
b
the amount of a lump sum payable to a member, or in respect of a deceased member, will represent a particular proportion of the available amount.