Introduction New section 213H Cash balance arrangements
30.New section 213H(1) defines the pension savings amount in respect of a cash balance arrangement as the “appropriate increase”. Cash balance arrangements in relation to a member are defined in section 152(3) and (5) of FA 2004 as a subset of money purchase arrangements in general as defined in section 152(2) and (4) of FA 2004. They are money purchase arrangements where the rate or amount of benefits is calculated by reference to an amount available for the provision of benefits to or in respect of a member, but otherwise than wholly determined by reference to payments made under the arrangement.
31.New section 213H(2) defines the appropriate increase by reference to the opening and closing rights multiplied by age-related factors.
32.New section 213H(3) defines closing rights.
33.New section 213H(4) defines opening rights.
34.New section 213H(5) provides that the pension savings amount in connection with a cash balance arrangement does not include minimum payments or amounts recovered under section 8 of PSA or section 4 of PSNIA.
35.New section 213H(6) provides for the pension savings amount to be treated as nil in a tax year where the individual becomes entitled to a serious ill health lump sum or dies.
36.New section 213H(7) defines “relevant assumptions” for determining opening and closing rights and provides a power to set those through regulations.