Personal Financial Services
A Scheme Pension is a pension paid to a scheme member by a registered pension scheme or on its behalf by an insurance company chosen by the scheme administrator.
Defined benefit schemes can only provide scheme pensions whereas defined contribution schemes have the option of offering a scheme pension, but are not required to do so. A defined contributions scheme is only allowed to pay a scheme pension if the member has been offered the option of a lifetime annuity as an alternative and rejected it.
The requirements for a scheme pension are:
It may be transferred whilst in payment to an insurance company to continue with future pension payments however, it is not permissible for the income to be altered or further tax free cash to be taken.
It may incorporate pension protection.
There may be further restrictions added to your scheme pension but the scheme trustees would advise in such instances.
The payment of scheme pensions is dependant on the financial wellbeing of the pension scheme unless the financial liability has been passed to an insurance company. For defined benefit schemes, members' scheme pensions are protected to an extent by the Pension Protection Fund (PPF).
For more information, or for advice on which option suits your requirements, please contact us or request a call back.
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