Financial Services > Pensions > Final Salary


The idea behind this type of pension is fantastic for employees, even if the rules can be complicated.

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Every member of the pension scheme pays a fixed percentage of their salary into the pension scheme and the employer contributes anything else that is needed to provide a lump sum when you retire, and an income for the remainder of your life. This usually includes a smaller continuing pension beyond that for your widow, widower or registered civil partner for the remainder of their life plus a smaller pension still for any children that you may have who are still in full time education.

The risks associated with investments and life expectancy are all taken by the employer and so the only risk the members face is whether or not the employer will always to able to make the contributions needed to honour their part of the bargain.


To protect the interests of all members of the pension scheme, Trustees will have to be appointed and their responsibilities include negotiations with the employer to agree how much money they will be putting in to the pension scheme each year.

Accounts are published for the pension scheme annually and you should check to make sure that the pension fund either has enough money to meet all of its obligations or that satisfactory progress is being made to reach that stage.

Please show the accounts to Corrigans if you do not feel comfortable making this judgement yourself.

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Because the employer is paying into this pension it is usually a good idea to join at the earliest possible opportunity and also to consider consolidating any other pension rights that you have built up previously into the new final salary scheme you have been offered.

You can give permission to the Administrators appointed by the Trustees to look at your existing pension arrangements and give you a quote for the extra period of service that they would give you in exchange for bringing those old benefits into the new scheme.

It will be hard for you to know whether or not the extra service offered represents fair value, so you should show both the offer and a copy of the valuation for your old pension benefits to Corrigans for a second opinion, before accepting the terms that have been put to you.

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When you leave a company that has been offering a final salary pension you should think very carefully before taking your pension rights away from that scheme. Even though you are no longer employed by that old company, the financial obligations assumed by your old employer remain the same and so it is perfectly possible that they would be obliged to carry on paying money into your pension in the years before you claim the benefits.

This is such a specialist area that you should always consult Corrigans before transferring benefits away from or into any final salary scheme.