StudentShare solutions
Triangle menu

Pension scheme - Essay Example

Nobody downloaded yet

Extract of sample
Pension scheme

212). There are several factors that determine the amount of money that each retiree receives. This means that the fact that the defined benefit pension scheme promotes the payment of fixed amount of money every month does not mean that all organizations agree to pay a fixed amount of money to all their employees. Even within the same organization, not all employees receive the same amount of money. The actual contract of fixed amount payment is therefore between the employer and each employee; rather than between the employer and all members on the staff. To create a difference between how much each employee would take upon retirement, there are a number of mechanisms used to calculate the monthly. The commonly procedure is for employers to multiply the number of years each employee worked by a constant pound value (Diamond and James, 1985, p.12). For example an employee may choose to multiple the number of years by ?120. In this case, an employee who worked for 20 years will receive 20 x 120 which is equal to 2400 every month. Defined Contribution Pension Scheme Unlike the defined benefit pension, the defined contribution pension scheme does not guarantee a fixed monthly amount of money. Somehow, the name of this scheme, which is defined contribution, explains the technique behind this scheme and that is, an employee would receive a certain amount of money based on certain contribution made. This calls for the setting up of a fund, such as a pension fund. The employer agrees to pay a certain amount of money into the fund each year. In some jurisdictions, the employee is also free make similar contributions into the fund. The amount of money that the employee would receive each month upon retiring therefore depends on the amount of income that the accumulated money in the fund can generate. A very special feature that defined contribution pension plan possesses is that the recipient of the benefit is also entitled to any investments that the fund that was set can generate. For instance if the fund was invested into a mortgage, the amount of interest that the mortgage investment generates also becomes part of the calculation when determining how much the retiree will receive at the end of each month after retiring. This therefore leaves employers who want to use this pension scheme as a source of motivation for their employees to look for highly beneficial investment funds that can guarantee their employers much revenue for selection. In the absence of such an investment fund, the only amount that the employee can be assured of would be the accumulated contribution made by the employer or by both the employer and the employee (Amoroso, 2003). Comparison between two types from perspective of members of the pension scheme Primarily, members of the pension scheme are made up of employers and employees. In the sight of each of these people, are there a number of factors that they would consider in either agreeing to go for defined benefit pension plan or defined contribution pension plan. Most commonly, the outstanding feature that these two people look at is what is referred to as market risk. Chuck (2012) notes that “market risk is the risk associated with changes in the value of the investments in the plan.” Technically, both types of pension plans are special forms of investments where by in the defined benefit p ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Pension scheme Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/9429-financial-service
(Pension Scheme Essay Example | Topics and Well Written Essays - 1500 Words)
https://studentshare.net/finance-accounting/9429-financial-service.
“Pension Scheme Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.net/finance-accounting/9429-financial-service.
  • Cited: 0 times

Summary

Finance and Accounting 1.What are defined benefit and defined contribution pension schemes? Compare them from the perspective of a member of a pension scheme. Defined Benefit Pension Scheme The distinction feature of defined benefit pension scheme is in the procedure of payment and the inputs of factors that determines the amount of money that a pensioner will receive…
Pension scheme
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Pension scheme"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Management Problem of the U.S. Pension Crisis

From the research, it can be comprehended that the onslaught of the economic crisis and the expectation that it will experience enormous budget deficits in the near future has prompted the increased rigor in the reform of America’s entitlement programs. If left unreformed, the Social Security system will be depleted of financial resources as the life expectancy of the current generation increases.

11 pages (2750 words) Essay
Public Pension Replacement Rates
Here, we are going to look at some of the causes for the variance in pension replacement schemes, in the US and Greece. However much both countries have developed economies, the pension replacement schemes somehow differ. For instance, the age factor, in both countries, a twenty-one year old is eligible to participate in pension plans.
3 pages (750 words) Essay
Teacher's Pension Scheme Reforms in the UK
Changes were introduced to the scheme in 2007, and these affected new entrants too. However, these changes have grown into a contentious issue with different sides holding different opinions about the reforms. This paper explores the ongoing negotiations between government ministers and union chiefs regarding the reform by focusing on the issues at stake, and tactics employed to have a glimpse of the situation in the long run.
8 pages (2000 words) Essay
Institutional investments- the pension schemes
This is a tax-free method of saving which includes government agencies and self-funded schemes among others; they vary as some organizations may have disability pensions among other benefits which are mainly to the advantage of the employer. Introduction Pension can be defined as a contract of an employee for a fixed amount of money that is payable on a regular basis upon retirement from work (Redhead 2003, pg.
8 pages (2000 words) Essay
Pension Trust Funds
Trusts can be classified into a large number of types such as express trusts, implied trusts, constructive trust, simple trust, special trust, private trusts, public trusts, fixed trust, discretionary trust, hybrid trusts, pension trusts and so on. Each of these differs from other in one or the other aspect. Pension trusts represent the largest accumulation of assets.
10 pages (2500 words) Essay
Requiem of the Dead Parrot: Monty Python, the Defined Benefit Company Pension System and the Government
Firstly, the reference made to Monty Python's parrot is one that places emphasis on the classic comedic stint made by the famed Monty Python group that was dominant in British humour in the 1960's. The Dead Parrot sketch was one of landmark comedic performances of the group as aired in the hit show, "Monty Pythons' Flying Circus."
8 pages (2000 words) Essay
Reporting Paper (Accounting)
The mergers and acquisitions have come up as the major step in the changing business methodology. The big companies are either acquiring smaller counterparts or are merging with the similar sized companies. It has been evident from thorough research and analysis
3 pages (750 words) Essay
Coursework 3 Individual Report
The report also talks about important factor considered in calculating and understanding how a will affects the lives of the deceased and why it is important to have one. The report is comprehensive and entails all the financial and accounting
7 pages (1750 words) Essay
The inequalities the pension schemes among different social groups

The paper is aimed at exposing the gains made by the already existing Chinese welfare system. The writer seeks to give an idea of the different methods used to collect the data that serves to inform this paper. When carrying out a comprehensive study, it is important to carry out both a statistical data analysis and document analysis to get a clear picture.

3 pages (750 words) Essay
Pension
To qualify for a basic state pension, an individual must have paid the National Insurance Contributions (NIC) or be credited with such contributions. Citizens who are working make
11 pages (2750 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Pension scheme for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us