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

• 401(k) plan
• Annual allowance
• Annuity
• Defined benefit pension scheme
• Funded scheme
• Occupational pension scheme
• Stakeholder pension scheme
• Unfunded scheme