My company is offering Group Company Pension for employees. I understand that there are a lot of types of company pension and I heard about some of them. I'm not really sure about this particular deal and I don't know would it be a good deal for me. How do Group Company Pensions function? Are they often good or should I consider other options?
It's very important and always recommended to take an advice from an expert to make the best pension plan. You have to consider you expectations after retirement and determine how much money would you need. Then you would get an idea how your pension plan should look like. Group Company Pensions is set by an employer and he pays contributions to it. This scheme is actually a money purchase scheme because fund is invested. When you retire your pension income would depend on how much were contributions, how well investments did and how would annuity rate stand. Money you would get is probably going to be aroun sum which is provided by final salary scheme, but the difference is that you get it annually. And there is also possibility that it grows more if the investments performed good. But it's also possible that you get less money then your contributions were worth. This scheme is secured by trustees and there are legal actions which protect the consumer. It could be risky so it's often just an additional investment. In my opinion a final salary scheme is the best company scheme you can get these days.
