The following Pensions guidance note provides comprehensive and up to date legal information covering:
There are a variety of possible pension arrangements for employees. The main options include:
occupational pension schemes
personal pension schemes
employer-financed retirement benefits schemes (EFRBS)
master trusts (including the National Employment Savings Trust (NEST) since October 2012)
the state pension
Employees may be members of and contribute to more than one pension arrangement at the same time eg the employer's occupational pension scheme and the employee's own personal pension scheme.
Occupational pension schemes can be set up as:
defined benefit (DB) schemes
defined contribution (DC) schemes
mixed benefit schemes
cash balance schemes
small self-administered schemes (SSASs)
sectionalised pension schemes
Occupational pension schemes (whether DB or DC) may also provide a facility for employees to top-up their benefits by paying additional voluntary contribution (AVCs) to the scheme (ie in addition to the ordinary contributions they are required to make under the scheme rules).
The two main types of defined benefit schemes are:
career average revalued earnings (CARE)
In defined benefit schemes, employees' benefits are defined in the scheme rules. In a final salary scheme, benefits are calculated by reference to a proportion of their final pensionable salary for each year of pensionable service ie employees accrue a proportion of their final pensionable salary in pension for each
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