What is a key condition for automatic enhancement features to apply?

• A. Affordability and plan rules.
• B. Employer discretion only.
• C. Guarantees fixed regardless of market.
• D. Only applicable to new joiners.

Answer: (A)

Automatic enhancement features depend on the plan’s ability to fund extra benefits and the rules that govern the scheme. If there is enough funding headroom (affordability) and the plan rules explicitly allow enhancements, they can be applied automatically without compromising other benefits. This ensures enhancements are sustainable and aligned with the scheme’s long-term viability.

Employer input matters, but it isn’t enough on its own—the funding position and the plan’s rules must support the change. They aren’t guaranteed regardless of market conditions; enhancements often reflect what the scheme can afford and may vary with funding or investment performance. And these features aren’t limited to new joiners—the rules may enable automatic enhancements for existing members as well.