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In this eBulletin we consider the amendments to the definition of money purchase benefits resulting from the Pensions Act 2011 which received Royal Assent last week in light of the Supreme Court's ruling in Houldsworth and another v Bridge Trustees Ltd and another [2011] UKSC 42.

In response to the decision, the Pensions Act 2011 redefines "money purchase benefits" retrospectively with effect from 1 January 1997.   The definition of money purchase benefits is narrowed to ensure that if benefits could cause a scheme to have a funding deficit, the scheme will not be classed as a money purchase scheme and will not be exempt from funding requirements.