Pension with both a deferred and Protected Rights section.

DogTailRed2

I have an old pension that has a deferred annual pension of 5k and also a section which states

"Plan was contracted-out of the State Earnings Related Pension Scheme (SERPS)
on a Protected Rights basis"

Value of the Former Protected Rights Account (PRA) value is 13k.

It goes on to say

"IMPORTANT NOTES ON YOUR PLAN BENEFITS
The value of your PRA Account quoted above is determined by the performance of the underlying investments of
the Plan at 01 April 2022. The value may go down as well as up.
As your main Plan benefits have also been preserved then the above benefit will act as an underpin to those
benefits already accrued and will only come into payment should the benefit payable from the above fund provide
a higher pension than that secured under the main Plan."

Does this mean that the 13k amount can only be used if it's a higher amount than the deferred benefit or can it also be used to purchase an annuity?

Thank you.

xylophone

Have a look at this

https://techzone.aberdeenadviser.com/public/pensions/Tech-guide-contracting-out

https://helpfiles.thepensionsregulator.gov.uk/members/hybriddetails

I wonder did your employer operate a COMB scheme (see guide) such that the scheme operated in separate sections, offering both a salary-related benefit (DB) alongside a money purchase section (DC), both satisfying contracting-out requirements?

At retirement, benefits were calculated on a hybrid basis - the pensioner would receive the higher of (a) the DB benefit (in your case termed the "main") OR (b) the DC (in your case termed the PRA account)?

This would be a DB with DC underpin.

DogTailRed2

I think it's probably the latter I'll get the larger of the two values.

Thanks.