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MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.
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:: Scheme Member | Types of Pension Scheme | What is a money purchase scheme with a defined benefit underpin?
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What is a money purchase scheme with a defined benefit underpin?
This Factsheet takes a detailed look at a variation of money purchase schemes – which provide some measure of ‘promise’ to the emerging pension. Because of this ‘promise’, these schemes are regulated as defined benefit schemes.
In its simplest format, a money purchase scheme with a defined benefit underpin provides you with two alternative pension options from the same pension scheme. Whenever you draw your pension benefits, you will get the better of:
- a ‘money purchase ’ element of the pension scheme
- a ‘defined benefit’ element of the pension scheme
You will not receive two pension benefits: just the better pension from one of the two alternatives.
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This Factsheet is not applicable to members of Money Purchase schemes
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