Occupational & Executive Pension Schemes

A company scheme is an extremely important benefit and although it should be remembered that the level and type of benefits can vary considerably from scheme to scheme, there is little doubt that occupational schemes represent by far the best method or retirement planning for most of those eligible to join.

An occupational pension scheme (OPS) is provided by the employer for the sole benefit of its own employees. The employer decides who can join the scheme, and when.

Some schemes are very small and are only offered to a select group of senior personnel whilst others offer membership to all employees, whatever their grade.

Some employers insist that the employee serves a minimum qualifying period or attains a particular age before joining whilst others offer immediate membership to new employees.

OPSs are available in both the public and private sectors.

There are two types of occupational scheme:

Final Salary Schemes – where the benefit is normally a fraction of this ‘final salary’ for each year of membership of the scheme.
Money Purchase Schemes – where the benefits payable depend on the total level of contributions made by the employer and employee and the investment performance achieved by the scheme, particularly in the period close to retirement.