When individuals leave employment having participated in their
employer's defined benefit occupational pension scheme for at
least two years (or five years in certain circumstances), one of
the options available to them is to leave their accrued pension
benefits in the scheme of their former employer as a deferred
pension. The Pensions Act 1990 (as amended) (the
"Pensions Act") gives these individuals
a statutory right to a minimum "preserved
benefit". Individuals may also become entitled to
preserved benefits in a limited number of other circumstances, as
set out in the Pensions Act. In order to prevent the value of
the preserved benefit diminishing over time, through the effect of
inflation, the preserved benefit is revalued annually in line with
the Consumer Price Index ("CPI").
