Personal Pensions:

• Personal Pension Plan (PPP) – Contributions build up a fund value which can be accessed from age 55
• Stakeholder pension (SHP) – is a low cost personal pension with the difference being they must meet minimum standards.
• Group Pension Pensions or Group Stakeholder Pensions – A series of personal pensions set up by an employer but each employee has their own pension pot
• Self-Invested Personal Pension (SIPP) – Is a personal pension but with much wider investment choices such as shares or commercial property
• Retirement Annuity Contracts (RACs) – Also known as a Section 226 policy – Similar to a personal pension but they can either offer a guaranteed annuity rate on retirement or the death benefits before retirement can be more restrictive than usual. Unable to take out a new RAC since 1^st July 1988

Occupational Pensions:

• Executive Pension Plan (EPP) – set up as “one man” schemes for directors or senior employees so that higher benefits could be given away from the main pension scheme.
• Small Self-Administered Schemes (SSAS) – Aimed at company directors. It typically has less than 12 members who must all be trustees. Very similar to the SIPP
• Section 32 policies – Pre A Day they were used for accept benefits from an occupational scheme. The GMP liability can be secured and the maximum benefit that could be provided were subject to the occupational rules rather than individual rules.

Targeted Money Purchase Schemes

• Hybrid Schemes – Featured parts of a DB and DC scheme. Target level of benefits are determined usually in line with a DB scheme. The big differences are:
  • the employer has not promised the illustrated level of defined benefit, and so can avoid paying for the defined benefits illustrated if the assumptions are not met;
  • the only benefit that is promised is the value of the money purchase assets;
  • early leavers from a targeted money purchase scheme would normally only be entitled to a preserved benefit of the money purchase assets;
  • even for those who stay until normal pension age, the employer may at any time elect to disconnect from the funding target and treat the scheme as conventional money purchase;
  • if the employer became insolvent, the trustees would have no claim against the employer’s assets, unless the scheme contributions were in arrears; and
  • disconnection from the target benefit level for any reason is likely to have a serious effect on the benefit expectations of the scheme members, particularly if they are close to retirement.