Company Pensions

Overview

Employer's pension schemes, superannuation, occupational schemes, defined benefit schemes, company pensions....... All these names refer to the same thing.
Many of the UK’s working population are members of a company pension scheme, and it often represents the most important benefit an employer offers.
The reason is simple. A good company scheme can offer the best retirement benefits available, at the lowest cost to the employee. Though it should be pointed out that, a poor scheme offers little more than the employee would have received from the state.

Eligibility to join a company scheme varies form 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 service, or upon reaching a certain age. These conditions are usually applied by companies who are susceptible to high turnover of staff, such as firms with many young employees.

There are two main types of company scheme, final salary & money purchase . They differ greatly in what they offer & 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 .