Final Salary Pension
Final-Salary Related Schemes
Final-Salary related schemes are also known as defined benefit schemes. With these, the amount you receive on retirement depends on your salary when you leave the company or retire, and the length of time you have been a member of the scheme.
It is usually paid at the rate of one-sixtieth of final-salary multiplied by the number of years of scheme membership (the accrual rate). So someone who is a scheme member for 40 years would retire on two-thirds of final salary.
Final Earnings Not the Stock Market
Your pension will depend on your final earnings and not on stock market conditions over your working life. But these schemes are becoming rarer, and many companies are changing their plans from final-salary related to defined contribution schemes.
When you leave a company you normally have the choice of leaving the money where it is to claim on retirement or transferring it to a new company's occupational scheme or to a personal pension plan. And if you leave a firm within two years of joining its pension you can have your own contributions, minus tax relief, returned to you, if the scheme's rules allow.
Independent Finanal Salary Pension Advice
For more information on reviewing your final salary pension scheme or retirement planning speak to the independent pension advice team from one our partner firms for a no obligation consultation.
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