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

14th December 2017
:: Scheme Member | Types of Pension Scheme | What is a defined benefit scheme?

What is a defined benefit scheme?
 
The two most common forms of defined benefit scheme are: ‘final salary’ schemes and ‘career average revalued earnings schemes’ (CARE schemes)
 
Both types of scheme use your pensionable salary as one part of the formula in order to calculate your pension, but there is a significant difference between the two. We explain in clear terms what these differences are.
 
It is not true that defined benefit schemes provide a guaranteed retirement pension.
 
The pension benefit paid will depend upon many factors, with the most important being the scheme’s ability to pay benefits to members as they fall due. If the employer’s business fails, it is likely that benefits will be reduced for some, if not all members (although Public Sector schemes are different in this respect). This Factsheets provides essential reading so you understand what your scheme can - and can’t - do.
 
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 defined benefit scheme? - for Active Members of Defined Benefit Schemes
What is a defined benefit scheme? - for Preserved Members of Defined Benefit Schemes
What is a defined benefit scheme? - for Pensioner Members of Defined Benefit Schemes
       
 
  Money Purchase scheme members
 
This Factsheet is not applicable to members of Money Purchase schemes
This Factsheet is not applicable to members of Money Purchase schemes
 
     

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