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They are based on final salary and years of membership of the scheme (members who joined before 1 April 2015) or career average salary (members who joined after 1 April 2015). There is an employer charge of 0.08% for administration costs, in addition to employer contributions at a rate of 20.6% of salary from April 2019.
The 2015 scheme involves paying towards a pension which will be based on the average of a member's pensionable earnings throughout their whole career, with a revaluation of active members benefits in line with the Consumer price index plus 1.5 per cent per annum. [47] [48] The 1995/2008 scheme is closed to new entrants.
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A traditional form of a defined benefit plan is the final salary plan, under which the pension paid is equal to the number of years worked, multiplied by the member's salary at retirement, multiplied by a factor known as the accrual rate. [9] The final accrued amount is available as a monthly pension or a lump sum.
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