Help Centre for Employers

What does Defined Contribution mean?

Sometimes known as “Money Purchase”, the amount of contributions that will be made into the fund are known in advance. However, the amount of benefits that will be paid at retirement are not known in advance as they will be dependent upon the value of the investments at retirement and the cost of purchasing an annuity (i.e. a pension).

In a defined contribution scheme, all of the risks sit with the individual.

 

We decided to appoint NOW: Pensions because of the simplicity and robustness of its scheme. The NOW: Pensions product is both cost effective and straightforward to implement... — Mark Roberts, Managing Director at gap personnel
NOW: Pensions is supportive, easy for our employees to understand and uncomplicated in terms of its implementation. Its structured approach removes the complicated investment choices & makes auto-enrolment a straightforward and simple process. — Mark Manaton, Managing Director, Blue Arrow Group
“We were impressed with the simplicity of its scheme. The ease of implementation was also a big plus for us and has removed much of the administrative headache.” — Neil Tune, HR director at Fitness First
...its simple design means the pressure is taken off us as the employer and avoids costly administration charges, whilst removing the burden of choice and ensuring the best possible retirement outcome for our employees. — Matthew Johnson, Head of Compensation and Benefits at Adecco Group UK & Ireland
I'm excited by the opportunity to help bring to the UK auto-enrolment market NOW: Pensions, a customer-friendly and responsive trust-based alternative to NEST and to contract-based offerings. — Chris Daykin, the former Government Actuary