Also known as a defined contribution scheme. A pension scheme where the benefits payable to an individual member are calculated by reference to contributions paid in to the scheme in respect of that member increased by the investment return achieved. At retirement the member's pension is secured by purchasing an annuity. The pension is therefore dependant on the level of contributions, investment return and the prevailing annuity rate at retirement.
Related links
multi-employer scheme (multi-employer pension schemes)
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.