Money Purchase

The difference between money purchase and defined benefit pensions is apparently well understood. So it may be hard to believe that there is sufficient legal uncertainty in the area for there to be any caselaw. In fact nothing could be further from the truth.

A recent case, Bridge Trustees v Yates & Others, has set the cat amongst the pigeons on this very subject. As a result, some members who thought they had safe money purchase benefits will see their benefits reduced as the scheme winds up in deficit. Whether certain benefits were money purchase or not was crucial because it affected whether those benefits were part of the statutory winding up priority order and where they came in that order.