Based near Milwaukee in Wauwatosa, Wisconsin, Evolution Retirement Services helps companies design and administer retirement plans including profit-sharing plans, 401(k) plans, money purchase pensions
and cash balance plans.
Those in defined contribution or money purchase pensions
have not escaped the effects of QE either, the NAPF said.
However, the trade-off is that benefit accrual must cease afterApril 5, 2012; for money purchase pensions
this means contributions must cease, and for final salary pensions the benefit value cannot increase by more than a 'relevant percentage'.
They both contribute to "money purchase pensions
" and if they retire at the same age with the same accumulated pension fund Ian would get a 10 per cent bigger pension.
Among the possibilities being considered are a ``freezing'' of the final salary scheme - already closed to new members - and a ``hybrid option'' involving part final salary and part money purchase pensions
Many money purchase pensions
- where cash is paid into a fund and invested to build up a lump sum to buy a pension at retirement - were not contributing enough to give investors a decent income.
It claimed that Government's plan to compel employers to contribute to the new Personal Accounts, the money purchase pensions
envisaged in the new Pensions Bill, might as well be an increase in National Insurance contributions, one more tax.
Newcomers to companies such as Tesco, Deeside-based The Big Food Group who own the Iceland frozen food chain and Littlewoods will no longer benefit from a final salary pension after these were ditched in favour of money purchase pensions
Jason Hollands, deputy managing director of Bestinvest, said, "The future is very uncertain for the average person in the UK, especially as final salary pension schemes are increasingly being ditched in favour of money purchase pensions
Sales of its mainstream pension products were 11 per cent ahead at pounds 1.3 billion, boosted by last year's relaxation of the tax rules for personal pensions and companies buying money purchase pensions
for their employees after closing final salary schemes.
The move has been made from Defined Benefit (DB), final salary pensions - which can be around 15 per cent of a person's salary, to Defined Contribution (DC), money purchase pensions
- where contributions can range between six and 10 per cent.
The move from final salary schemes to money purchase pensions
is just one aspect.