Apt Financial Management

Company Pension Schemes

Although pension schemes vary from company to company, it is likely to be one of two types - namely 'salary related' or a 'money purchase' scheme.

Salary related scheme

In a salary related scheme the retirement benefits you receive are based on your salary and the number of years you have been in the scheme.

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They can also provide valuable additional benefits in the event a member dies in service or has to retire through long term ill health.

These schemes are increasingly being replaced by money purchase schemes owing to the high cost for employers to provide the benefit guarantees.

Money purchase scheme

A money purchase scheme provides retirement benefits based on how much has been paid into the scheme and how well the money has been invested.

Many larger employers will have a scheme booklet which provides a guide to the type of scheme on offer and the benefits available if you should join.

On retirement, your fund is used to buy an annuity to provide a regular income for life.

What if your employer does not offer membership of a company pension scheme?

Your employer is required to offer you the chance to join a pension scheme. They are under no obligation to provide a company scheme but if they have more than five employees they should provide access and information to a Stakeholder Pension.

A Pension is a long term investment the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

Apt Financial Management, 4 The Willows, Hulland Ward, Ashbourne, Derbyshire DE6 3EW
Phone: 01335 370 515