Pembroke Wealth Management: 
company pensions
Employers' pension schemes, Superannuation, Occupational schemes - defined benefit schemes / defined contribution schemes, Company pensions....... all refer to Employer related pension schemes.
A good proportion of the UK’s working population are members of a 'company' pension scheme. Occupational pension schemes are those run by your current or former employer/s.
These come in two basic types:
- Defined Benefit (also known as Final Salary Schemes)
- Defined Contribution (also known as Money Purchase schemes)
Group personal pensions are becoming more popular with employers. These are low cost personal pension plans bought by groups of employees under the auspices of their Employer. These group personal pension schemes share lower costs of administration. (See section on Personal Pensions)
Your Employer may make a contribution to your Occupational pension scheme in addition to deducting a percentage of your own salary as a compulsory personal contribution and paying that into the scheme. You may make extra contributions yourself to your occupational scheme to boost your pension provision up to the maximum limit ( the Annual Allowance). Tax relief is available on pension contributions up to 100% of your taxable earnings. (You may contribute more than your taxable earnings but no tax relief will be given on payments above that amount).
Eligibility to join a company scheme varies from company to company. Some allow their employees to join either straight away or very soon after joining the company, whilst others put in place conditions before an employee can join, such as a minimum 2 years of service, or upon reaching a certain age.
The two main types of company scheme final salary & money purchase differ greatly in what they offer and how they work. At present, final salary schemes are the most common in terms of number of members, but many large firms are now switching over to the money purchase type because they are cheaper for the Employer to fund .
For more information on Company Scheme Pensions, please contact us.