An occupational pension scheme is generated by a company or organisation for the benefit of its employees. In contributory schemes both the employer and employee contribute to a fund which grows free of tax during the savings period. In non-contributory schemes, only the employer contributes.
The amount paid out to the employee on retirement will depend on the type of scheme and reflect either the contributions put in and investment performance (Defined Contribution) or the number of years service and the final salary of the employee (Defined Benefit).
This is a very broad overview and schemes can vary so it’s important to understand what type of scheme that you are in and what that means for you.
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