Why Privatized Public

Pension Plans Matter

Student’s Name
Professor’s Name
Course Name
Date
 Why Privatized Public Pension Plans
Matter
• Private pensions plans involve setting money to help an individual during
retirement (Guy, 2021). The value of the money relies on the money an individual
pays and the performance of their investments.
• One of the primary reasons why privatized pension plans matter is because an
individual can enjoy tax benefits. Privatized pensions are long term savings which
comes with added tax relief benefits.
• In privatized plan every individual can contribute. It encompasses contributions
from the employed, self employed and even the non working (Bond, 2017).
Additionally, a different individual can help another pay their schemes.
 Why Privatized Pension Plans Matter
Cont…
• Moreover, privatized public pension plans guarantee retirement income. Once an
individual retires, they can take 25% of their pension as tax free lump sum and also
attain the remaining income directly form their pension pot (Bond, 2017).
Therefore thy are still able to benefit from returns on pension investments.
• Privatized pension ensures earning of compound interest among individuals. The
more people contribute hey benefit form tax reliefs and therefore making returns
on investments.
• Majority of privatized pensions are portable and flexible and therefore if situations
change one may start contributing the same plan.
 How To Make The Plan Work
• Private pension plans work in a similar way as workplace pensions
however they are set by an individual rather than the employer.
• Making a private pension plan work will involve contributing regularly
for instance monthly into my fund and my pension provider ultimately
adds the tax relief (“What is a private pension,” 2019).
• The amount of finance I invest in my personal pensions will often be
invested in various assets cash as cash, property , shares and bonds.
 Cont…
• At the beginning of my private pension plan, there exist numerous choices
and options of pension funds form which to select form depending on the
risks I would be willing to take.
• After attaining the retirement age of about 58 years, I can be able to
acquire my private pension as a lump sum and apply it to purchase
annuity.
• I can also leave the amount invested and withdraw cash amounts when I
need through drawdown
 References
Bond, T. (2017). Why Pensions Matter The history of defined benefit pension plans
in the United States of America. National Public Pension Coalition: NPPC. https://
protectpensions.org/wp-content/uploads/2017/03/NPPC-Why-Pensions-Matter-FIN
AL.pdf
Guy. (2021, March 4). Pension need-to-Knows. MoneySavingExpert.com. 
https://www.moneysavingexpert.com/savings/discount-pensions/
What is a private pension? (2019, October 14). Combine your pensions | Be
pension confident | PensionBee. 
https://www.pensionbee.com/pensions-explained/pension-types/what-is-a-private-p
ension