MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.

23rd August 2017
:: Scheme Member | Types of Pension Scheme | What is a cash balance scheme?

What is a cash balance scheme?
 
A cash balance scheme is a form of money purchase scheme.
 
A cash balance type of money purchase scheme will provide you with money purchase benefits at retirement – usually in the form of pension and tax free cash lump sum. However, until you begin to draw your pension benefits you will not know the actual amount of pension or lump sum that will be available.
 
In a cash balance type of money purchase scheme, the investment risk before benefits are claimed is borne by the employer. Any shortfall on promised ‘pots’ are made up the employer.
 
Read on to see how a cash balance scheme differs from a usual money purchase scheme.
 
To find out more, choose one of our free Factsheets on the right to match your category of membership.
 
 
Not sure which category of member you are? See our definitions:
 
 
 
 
 
See our Glossary for definitions of phrases in our Factsheets
       
 
 
 
 
 
  Defined Benefit scheme members
 
What is a cash balance scheme? - for Active Members of Defined Benefit Schemes
What is a cash balance scheme? - for Preserved Members of Defined Benefit Schemes
What is a cash balance scheme? - for Pensioner Members of Defined Benefit Schemes
       
 
  Money Purchase scheme members
 
This Factsheet is not yet available to members of Money Purchase schemes
This Factsheet is not yet available to members of Money Purchase schemes
 
     

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