Defined contribution pension scheme

(DC).

A pension scheme where benefits are based on how much money has been paid into the scheme and the investment returns earned, a significant part of the sum achieved often being invested in an annuity at market rates at - or soon after - retirement.

Such schemes are by definition funded.

Also known as money purchase schemes.

See also

• Annual allowance
• Defined benefit pension scheme
• Occupational pension scheme
• Stakeholder pension scheme