A National Pensions Reserve Fund has been established to provide a fund for future payments of public service and social welfare pensions. This is different from funded pension schemes. In a funded scheme, you are a member of the scheme and you have a direct interest in the fund. A defined benefit scheme is one where the benefit entitlement is defined in some way by reference to your earnings, your length of service, an index or a fixed amount. In defined benefit schemes, the contributions may have to be varied from time to time in order to make sure that the fund can meet the level of benefits.
Some schemes have provisions for the employer to top up the fund if necessary.
A defined contribution scheme is one where the contribution is fixed by agreement but the benefits are decided by reference to the value of the contributions paid under the scheme and are not fixed in advance. So, you do not know what level of pension you will get. Occupational pensions and social welfare pensions Occupational and personal pensions operate independently of the social welfare pension system and there is no statutory link between the two. However, it is common for occupational pensions to take into account the level of social welfare pension received in calculating the level of benefit. For example, some schemes provide for a benefit, which, together with the social welfare pension, will give you a half or two-thirds of your final salary.