Generally, if a funded pension scheme is formed as a trust, the employer’s business and the trust are two separate legal entities.

A ‘Defined Benefit’ scheme is a pension scheme that provides a specified monthly benefit that is pre-determined according to the salary of the employee, the service history, tenure and age (or a combination of these factors), rather than on the investment return gained on any contributions made to the scheme. Generally, the trustees of the pension scheme obtain services from third parties to assist them to manage the pension fund.

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