A retirement pension scheme that specifically sets out the contributions amounts, typically based on a percentage of remuneration. The payout on retirement is on an accumulation measure, where returns are based on amount invested and accrued investment returns.

Within this scheme, employees contribute or in other words, pay a percentage and amount which is meant to be fund for their retirement; the organisation sponsoring it will sometimes match it with a portion of the employee’s contribution as a benefit. This plan, however, places a limit on how much an employee can withdraw, without penalties.