Annex A: Glossary of Pension Provision Occupational and personal pensions
15.Occupational pension schemes are arrangements organised by employers to provide pensions for their employees. Schemes may be:
	salary related (defined benefit) where the pension payable depends on the length of service and the salary (usually the final salary) earned by the employee; or
	money purchase (defined contribution) where the contributions are invested and the pot of money is used at retirement to buy an annuity which provides the pension.
There are 10.3 million members of occupational pension schemes (8.9 million in salary-related schemes, 1.1 million in money-purchase schemes, and 0.3m in ‘hybrid’ schemes).
16.Personal pensions are money purchase arrangements between pension providers and individuals (although there may be group arrangements through employers to give access on favourable terms – group personal pensions).