Occupational Pension Schemes

Occupational Pension Schemes are pension arrangements set up by employers to provide an income in retirement for their employees. While the employer sponsors the scheme, the fund is administered by a Board of Trustees responsible for paying benefits.

Defined Contribution Schemes
Often called Money Purchase Pensions, these schemes invest the money the employee pays into it (along with the employer’s contributions) and accrues an accumulated sum when the employee retires.

Benefits are dependent on:

  • How much money has been paid in
  • How well the invested funds have performed
  • The annuity rate at the date of retirement (the factor used to convert the pot of money into a pension)

Defined Benefit Schemes
More commonly known as Final Salary Schemes, they promise to pay a certain sum each year once the employee reaches retirement age. For each year of service, the employee builds up an entitlement which is usually 1/60th or 1/80th of their final salary. As an example, if your final salary was £65,000, you have worked for the firm for 32 years and you were on a 1/60th scheme, the formula is 30 x 1/60th x £65,000, meaning the final salary pension paid to the employee every year is £34,666.

Defined Benefit Schemes carry a good deal of risk as well as a higher cost in that the employer is responsible for ensuring enough money is available to pay the pensions of all retired employees for the duration of their lifetimes, plus any dependents’ pensions due.

If you are an employer running a Final Salary Scheme and you are concerned about funding levels or trustee obligations, or if you would like a thorough review of the scheme to ensure that employer and member needs continue to be met, please contact us.

In addition, for more detailed information on our range of Occupational Pension Schemes, please call 020 7371 5244 or email info@jeffreyshenryfinancial.co.uk


Contact Us

Jeffreys Henry Financial Services
5-7 Cranwood Street

Tel: 020 7371 5244
Fax: 020 8371 3112
E: info@jeffreyshenryfinancial.co.uk


Jeffreys Henry Financial Services Limited is an appointed representative of Vintage Wealth Management Limited which is authorised and regulated by the Financial Conduct Authority. Number 593380.  Incorporated in England and Wales.  Company number 03824520.  Registered Office: 5-7 Cranwood Street, London, EC1V 9EE. Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service please visit www.financial-ombudsman.org.uk.

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Tel: 020 7371 5244
Fax: 020 8371 3112
E: info@jeffreyshenryfinancial.co.uk