From 1 October 2015, members whose only benefits under a scheme are money purchase (DC) benefits will have vested rights and be entitled to deferred benefits after 30 days' pensionable service (up from the current two years). The policy behind this is to bring occupational DC schemes in line with personal pensions.
Affected members will no longer be entitled to a refund of contributions when they leave pensionable service once the 30 day limit is reached. It will apply to open DC schemes and DC sections of hybrid schemes but not to DC AVC sections of DB schemes.
The new requirement is not overriding and strictly should be written into scheme rules.
The change applies only to members commencing relevant pensionable service on or after 1 October 2015. So, someone joining on 30 September would have two year statutory vesting, someone joining the next day would have 30 day vesting.
This means that DC schemes and schemes with DC sections should be putting in place an amendment by 1 October 2015 for new joiners and must make sure that scheme communications for new joiners reflect the change.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.