Type of Hybrid Arrangement

If you have a hybrid arrangement , the lifetime allowance enhancement factor will be the greater or greatest of:

• the cash balance arrangement non-residence factor
• the other money purchase arrangement non-residence factor
• the defined benefits arrangement non-residence factor.

You should select the type of arrangement that would provide the highest amount for the relevant period.

A hybrid arrangement is an arrangement where only one type of benefit will ultimately be provided, but the type of benefit that will be provided is not known in advance because it will depend on certain given circumstances at the point benefits are drawn.

For example, a hybrid arrangement may provide the member with other money purchase benefits based on a pot derived from the contributions that have accrued over time, but subject to a defined benefit minimum or underpin. If the benefits provided by the money purchase pot at the point benefits are drawn fall below a certain defined level, for example 1/60ths of final remuneration for every year worked, that higher defined benefit will be provided. So the benefits will be either other money purchase benefits, or defined benefits.