Which pension should I choose?

There are a number of options available to you when deciding on the pension that best suits you.

Contributing to a pension fund is important if you want to have a certain standard of living in retirement. Relying on the State pension might not be enough to sustain you well into your retirement and therefore it is highly likely you will have another pension arrangement in place to support you when you retire.

There are three types of pensions: Occupational pension schemes usually involve both employee and employer contributions. These schemes are mostly for private sector workers but include funded schemes set up by commercial entities too. Personal pensions are individual savings contracts designed to provide retirement benefits, which include a Personal Retirement Savings Account (PRSA), a Retirement Annuity Contract (RAC) and Buy-Out Bonds (BOB). Public service pensions are based on a pay-as-you-go model and these pensions are provided for civil and public servants.

For Defined Contribution (DC) pensions, the amounts available for benefits at retirement or leaving service depend on the value of the investment fund accumulated for the member, and there is no guarantee of any minimum benefit. Most funded occupational pension schemes and all personal pensions are defined contribution.

A Defined Benefit (DB) pension sets out the specific benefit that will be paid to a retiree. This calculation takes into account factors such as the number of years an employee has worked and their salary, which then dictates the set level of pension and/or lump sum that will be paid on retirement.

The main difference between a DB scheme and a DC scheme is that the former promises a specific income and the latter depends on factors such as the amount you pay into the pension and the fund's investment performance.

Deciding on the best pension for you is a big decision. Whether you're an employer or an employee, Zurich has many pension options for you to choose from. Click here to find out about all the options open to you.

The information contained herein is based on Zurich Life's understanding of current Revenue practice as at October 2017 and may change in the future.

Warning: The value of your investment may go down as well as up.
Warning: If you invest in these products you may lose some or all of the money you invest.

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