Defined contribution (DC) pension scheme
Also known as a money-purchase scheme (www.practicallaw.com/0-107-6857). 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 (www.practicallaw.com/A35823) or scheme pension (www.practicallaw.com/9-422-1507). The pension is therefore dependant on the level of contributions, investment return and the prevailing annuity rate at retirement.