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Benefit provision - Coggle Diagram
Benefit provision
Savings for retirement (sources)
State pensions
income from former employers' pension schemes
income from personal pension schemes
Survivors' benefits from pension arrangements of a late spouse or other family member
savings from a non-pension arrangement
any income from continued employment during retirement
State provision
Level and form depends on the objectives of the State
Key reason to provide benefits is for the financial protection of the population
Overall level of benefits provided by the State will reflect factors including:
a view of the minimum level of total income that is required
the government's political preferences between higher tax/ higher benefits and lower tax/ lower benefits
the availability and take-up of non-State forms of provision within the country.
May target benefits to citizens with specific characteristics e.g. those most in need
Personal provision
Level and form depends upon the objectives of the individual
Key reason to supplement any State and employer provision to ensure an adequate standard of living
Factors taken into account in designing their benefit provision
provision by the State and employers
any incentives to make provision such as tax concessions
their attitude to risk and the ability to pool risks, for example by the use of products with investment guarantees or by purchasing annuities
Individuals may save for retirement using approaches other than 'pension schemes', such as:
property
savings accounts
unit trusts
Employer provision
Level and form depends on the objectives of the employer
Key reason to provide benefits is to attract and retain staff
Factors taken into account in designing its benefit provision
any legislative requirements for a minimum level of benefits
any incentives to provide benefits such as tax concessions
the need of employees
the needs of the business
Market practice
its budget and risk objectives which will take into account its covenant