career average pension

{{Short description|Occupational pension scheme}}

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A career average pension or career average revalued earnings pension (CARE pension) is a type of occupational pension scheme, where people saving for retirement pay for a benefit after retirement where they will receive a sum that is calculated according to their average earnings over their career.{{Cite news |date=2011-03-10 |title=Career average pensions: How do they work? |language=en-GB |work=BBC News |url=https://www.bbc.com/news/business-12698920 |access-date=2023-03-07 |archive-date=13 June 2021 |archive-url=https://web.archive.org/web/20210613051658/https://www.bbc.com/news/business-12698920 |url-status=live }} Particularly in UK pensions, this model has been introduced as an alternative to both defined contribution pensions, which may run out and lead to old age poverty if they live longer, and final salary pensions which give people a benefit based on the last salary they earned before retirement. Career average pensions avoid a situation where, in their last few years of work, employees jumped up to management positions with much higher salaries: meaning that lower earners do not subsidise much higher pension benefits for just a few people.

UK public sector CARE pensions are revalued annually in accordance with rates issued by His Majesty's Treasury under the Public Service

Pensions Act 2013.[http://www.legislation.gov.uk/uksi/2018/338/pdfs/uksiem_20180338_en.pdf Explanatory Memorandum to the Public Service Pensions Revaluation Order, 2018], accessed 12 May 2018