Understanding Defined Benefit Pensions In Ireland: A Guide for Beginners
Defined benefit pension are a popular form of retirement funding in Ireland. They allow employees to receive a guaranteed level of income during retirement, which is based on their final salary when working for the employer. This means that if your salary was €50,000 when you retired and had worked there for 10 years then your pension will be at least €50,000 per year.
What is a defined benefit pension?
A defined benefit pension is a type of pension that provides a guaranteed lifetime income to the member. It’s also known as a DB pension, because it’s based on the employee’s final salary at retirement.
DB pensions can be provided by the employer or an insurance company (known as an insurance-based DB). This means that if your company pays you into your DB, then they’ll often pay part of what it costs them out of their own pocket—and it’s usually tax-free too!