This scheme provides a fixed, pre-determined income in retirement based on factors like years of service and final salary.
The employer assumes the investment and longevity risks, ensuring predictability for the employee.
Elimination of Other Options:
A: Contributions may be required from the employee, depending on the plan.
B: Index-linking to inflation is a feature of some schemes but not universal.
D: Investment performance is not guaranteed but managed by the employer.
References:
ICWIM Module 5: Discussion on pension types and benefits.
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