Defined Contribution Scheme
Defined contribution schemes
Defined contribution schemes are also known as money purchase schemes. With this type of pension you know what you are contributing towards your pension, but what you receive when you retire depends on the performance of your pension fund(s) over the years, and on economic conditions when you actually retire.
On retirement, the money would normally be used to purchase an annuity (a regular income for life) which pays an income until you die.
You do not have to accept the annuity offered by the company running your scheme.
You have the right to choose the open market option, in other words, you can shop around for the best annuity rates.
For more information on defined contribution schemes or finding the best annuity rate speak to the independent pension advice team from one our partner firms for a no obligation consultation.
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