R.J.
Nash
Consultancy Ltd
Independent Financial Solutions
•
|
|
|
|
Company pensions are set up by employers for their staff. The pension scheme can be either 'Final Salary' or 'Defined Benefit'. With a Final Salary pension scheme, either the employer or the employee or both contribute to the scheme on a monthly basis. When the employee retires he or she receives a pension based upon the number of years over which his or her contributions have been made. The scheme can also provide a tax free lump sum with a lower pension as opposed to pure pension. Alternatively, an employer may set up a Defined Contribution pension scheme (also known as Money Purchase) in this case the monthly contributions are put into a fund earmarked for that particular employee who, when he or she retires, is able to take a tax free lump sum and with the balance purchase an annuity (also known as Pension). Annuities are sold by pension and insurance providers in exchange for a lump sum which then provides the policy holder with an income throughout his or her life.
|
|
|
Occupational Schemes