Benefit details

If your scheme has 12 or more members, you will need to answer questions about benefits.

For some benefits, we will ask you:

the number of members receiving each benefit
the asset value used to provide the benefits

We will ask you to indicate which members are receiving the benefit for the first time this year and which members are receiving an ongoing benefit initiated in a previous year.

Where you have members and dependants receiving benefits from the scheme, please indicate the number of members and dependants who started receiving benefits from the scheme in the 12 months prior to the effective date for the latest scheme membership details.

For the purpose of this section, where a member is receiving benefits on more than one basis (for example, phased drawdown where they receive both a drawdown pension and lifetime annuities in the name of the trustees), please include them under each benefit type that they are receiving. This information is not used for levy purposes.

Purchase of a lifetime annuity in the name of the trustees

Select ‘Yes’ if the scheme rules allow for lifetime annuities to be bought in the name of the trustees.

If the scheme rules permit this, indicate the total number of members and dependants, if any, receiving benefits on this basis, whether they have drawn their benefits in full or under phased retirement.

Phased retirement is where a member uses their pension pot in stages to provide an income – periodically using part of their pension pot to draw a tax-free lump sum and buy a lifetime annuity, leaving the rest of their pot invested. 

Exclude any members or dependants where the annuity has been bought in the name of the individual rather than in the name of the trustees.

Payment of a scheme pension directly from the fund as self-annuitisation

Select ’Yes’ where the scheme rules permit payment of a scheme pension directly from the fund (this is known as self-annuitisation). The member’s pot is converted to pension income in accordance with a process which is set out in the scheme rules. Self-annuitisation means that the scheme itself has promised to pay a member a pension income for the rest of their life and this is funded directly from the scheme assets and NOT secured via either:

an annuity or an insurance policy or
capped or fixed drawdown pension.

A ‘scheme pension’ is a pension that meets the conditions laid down in paragraph 2 of schedule 28 to Finance Act 2004.

Uncrystallised funds pensions lump sums

This should include where an uncrystallised funds pension lump sum (UFPLS) has been paid to members or dependants in the 12 months prior to the effective date for the latest scheme membership details.

An UFPLS is a lump sum taken from funds that have not yet been used to provide other retirement benefits, such as scheme pension or drawdown.

Drawdown pension directly from the scheme

Include the number of members who accessed drawdown for the first time in the 12 months prior to the effective date for the latest scheme membership details. Only include members who started receiving the benefit in this 12-month period.

Drawdown pension is where a member draws an income from the scheme while leaving the funds invested. It is also known as income drawdown. Only include members who are taking their drawdown pension directly from the scheme itself. Do not include members who transfer their pot to another scheme, for example a self-invested personal pension (SIPP), and take drawdown from that scheme.

There are two types of drawdown pension: ‘capped drawdown’ (only for members who took this out before April 2015) and ‘flexi-access drawdown’.

Under capped drawdown, there are limits on the income the member can take, whereas under flexi-access drawdown, there are no limits.

Under a drawdown pension, a part of the fund may also be used to purchase a fixed term annuity whilst leaving the rest of the fund invested.

Include members who are taking drawdown directly from the scheme on eitherany of these bases. Drawdown pension members who have currently elected to draw nil income should still be counted as receiving a drawdown pension..

Do not include benefits which are defined as a scheme pension. A ‘scheme pension’ is a pension that meets the conditions laid down in paragraph 2 of Schedule 28 to Finance Act 2004.

Contracted out benefits on a defined benefit basis

Guaranteed Minimum Pensions (GMP) or section 9 (2B) rights. Some schemes were set up so that the main part of the scheme provides for defined contribution benefits but the scheme was contracted out of the state second pension on a defined benefit basis. Such schemes have promised to provide a GMP (benefits accrued before 6 April 1997) or section 9 (2B) rights (benefits accrued between 6 April 1997 and 5 April 2016) as part of the members’ overall benefit.

This question relates only to contracting out on a defined benefit basis. Contracting out on a defined contribution basis ceased with effect from April 2012. Please see the DWP website for more information.

Select ‘Yes’ if there are members who have any of these types of benefits within the scheme which they built up in the past.

If you are not sure whether the scheme provides these benefits, you should refer to scheme documents such as the trust deed and rules, member booklets and announcements, information provided to members on transfer out of the scheme, or annual benefit statements. You could also discuss with your scheme advisers.

A defined benefit underpin

The scheme pays the greater of a member’s DB benefit or the annuity/pension which could be provided by their DC ‘pot’. The underpin could be on a contracted out (GMP or Section 9(2B) rights) or contracted in basis. Additional funding may be needed if the DB benefit is greater than the benefits that could be provided by the member’s DC pot. This option will result in the payment of one benefit on an 'either/or; basis'.

Select  ‘Yes’ even if the scheme no longer offers the particular benefit to active members but there are still members who have any of these types of benefits within the scheme which they built up in the past. Select ‘Yes’ even where the DC benefits currently exceed the underpin and the DB benefit is not triggered.

A guaranteed pot which is made available at retirement for the provision of retirement benefits.

The pot could be calculated by reference to a member’s final or average salary (for example, 3/80 of final salary for each year of service) or simply to a fixed sum per year of service, so that the total minimum sum available at retirement is known in advance. Some schemes also, or as an alternative, may provide accrued benefits with a guaranteed rate of investment return. This may be called a cash balance scheme.

Select ’Yes’ even if the scheme no longer offers the particular benefit to active members but there are still members who have any of these types of benefits within the scheme which they built up in the past. This question is designed to identify where guarantees as to the amount that will be available for benefits are being provided by the scheme itself. The type of fund invested in (for example with-profits) is not relevant.