Alun Rees-Williams

So three different types of contributions, but you end up with a lump sum of money at the end of it.

And what you do with that lump sum of money at the end is up to you.

You buy an annuity, you take drawdowns, or you cash it in effectively, much like KiwiSaver.

Defined benefit schemes are where your employees sponsor the scheme and you end up with a defined, like a set amount of money based on your final salary at the end of your, or at your normal retirement age, which is generally around 60 in the UK for those types of schemes.

Yep, and it's guaranteed usually.

Much less common.

Right.

Much less common.

The deal with those sort of pensions is they were much more common years ago.

A lot of the government agencies still have them, though, but much more common.

But they became really cost prohibitive for companies because you've got to think about people living a longer period of time.

You've got a cohort of people coming through now into retirement that were expected to live into their retirement.

let's say, 70s, and they're living into their 80s and 90s.

And it's not like they've put more money in.

They just have to take a longer benefit.

So the schemes generally have to find funding for it, right?

So some of the schemes, some of the really big schemes in the UK, government schemes, are unfunded.

So it means there's no money sitting in the pot.

It's basically people that are paying into it now that are funding the people that are retired.

That's a little bit, but they are government backed schemes, so they're not really Ponzi's, but yeah, difficult schemes.