... pensions. The second type of arrangement called "defined benefit" (DB) (also final salary) scheme is more favourable for employees, less then for the employer. The basic distinction compared to DC lies on fact that DB scheme specifies at the outset what a pensioner can expect to receive, provided he or she maintained the contributions. The company is then obliged to pay to pensioners their pension regardless the performance of the underlying fund. However, in an effort to allure new workforce and provide them with a "luxury" certainty after retirement in form of DB, the companies themselves see them trap in a problem. As a recent survey carried out by National Association of Pension Funds points out, in 2003 there were 46% of the 255 significant UK companies operating a DB scheme. During the same year, however, 41% of those companies had to close their funds to new members and ...

See this essay or coursework document in full right now