What is a final salary pension?
A final salary pension refers to a kind of defined benefit scheme offered by your company. The money you receive is dependent on your final salary which you receive from your employer, and the amount of time you have been part of the scheme.
You can usually expect to receive a retirement income which is based on a portion of the final salary you earn at the company. Although, these days this kind of pension scheme tends to be offered only by larger companies.
How does a final salary pension work?
Usually, a final salary pension is administered by a Board of Trustees on behalf of your company, rather than a pension provider.
The board will then assume responsibility for all aspects of the scheme, including payment of the pension to employees. Furthermore, there is often a Scheme Administrator in place to manage the day-to-day activities of the scheme.