Mandatory earnings-related pensions

Generic earnings-related schemes are of four different types governed by different rules of benefit calculation. DB schemes specify a nominal accrual rate, expressed as a percentage of individual pensionable earnings,at which benefit entitlements build up for each year of coverage. The higher the contribution rate the higher the accrual rate that can be sustained by contributions. In points schemes, the pension benefit is equal to the number of points accumulated during the career multiplied by the point value. FDC (NDC) schemes apply an annuity divisor to turn (notional) accumulated capital in the individual account at retirement age into a monthly pension benefit. presents future parameters and rules for benefit calculation that will apply to people who enter the labour market in 2018, according to the latest legislation.