The benefits that will be paid at regular retirement age for service up to a given point in time, whether vested rights or not. They may be calculated in relation to current earnings or projected earnings.
A financial contract between an insurance company and the policy holder (purchaser) that provides for a series of payments at regular intervals to be received for a number of years or over a lifetime. Earnings of annuities grow tax-free until payouts begin, which is usually around 65. Annuities are hybrids of insurance and investments. Examples include variable, fixed, deferred, and market value adjusted.
A pension scheme in which the beneficiary makes a defined contribution (usually a percentage of pensionable salary) and the main sponsor pays the remainder of the (unknown) cost of providing the benefits. Historically most UK defined benefit pension schemes were established to be of this type. (Source: Association of Corporate Treasurers)
A captive insurance company is a wholly owned subsidiary company that provides risk-mitigation services for its parent company or a group of related companies. A captive insurance company may form if the parent company cannot find an outside firm to insure them against particular business risks, if the premiums paid to the captive insurer creates tax savings, or if the insurance provided is more affordable or offers better coverage for the parent company's risks.
A Cash Balance Scheme is a defined-benefit pension plan under which an employer credits a participant's account with a set percentage of his or her yearly compensation plus interest charges. As such, the plan's funding limits, funding requirements and investment risk are based on defined-benefit requirements. As changes in the portfolio do not affect the final benefits to be received by the participant upon retirement or termination, the insurance company solely bears all ownership of profits and losses in the portfolio.
A benefits scheme which does not admit new members. (Contributions may or may not continue and benefits may or may not be provided for future service.) Similarly, insurers can be closed to new business, or have closed funds. (Source: Pensions Management Institute (PMI) / Pensions Research Accountants Group (PRAG))