Defined contribution (DC) pension scheme
Also known as a money purchase scheme (www.practicallaw.com/0-107-6857). A pension fund where the benefits payable to an individual member are calculated by reference to contributions paid into the scheme or arrangement in respect of that member, increased by the investment return achieved. At retirement, the member can choose to secure an income by designating funds as available for drawdown pension (www.practicallaw.com/7-507-1079), purchasing an annuity (www.practicallaw.com/A35823) or taking a scheme pension (www.practicallaw.com/9-422-1507), depending on the options offered in the scheme rules. Alternatively, the scheme may allow the member to withdraw one or more uncrystallised funds pension lump sums (www.practicallaw.com/9-602-0846) once they have reached normal minimum pension age (www.practicallaw.com/5-204-0445) (or if they meet the ill-health condition (www.practicallaw.com/0-204-0966)).