Unfunded Unapproved Retirement Benefit Schemes (UURBS)

An UURBS relates to a promise of benefits by an employer to an employee, where the employer does not set aside a specific fund for that purpose, but does make provision in the employer annual accounts for the potential liability.

The scheme is reliant on the continuity of the company and the company's ability to meet due payments. As with a FURBS, it is used to provide benefits for employees who are earning more than the pensions earnings cap.

The main advantages are no funding in advance and no tax is payable by the employee on accruing benefit. On the downside, there is minimal security and inheritance is payable.

These schemes do not enjoy such favourable tax treatment as approved pension schemes. The usual purpose of such schemes is to provide benefits in excess of the normal benefit level of approved schemes.

Last Updated: January 2006 © Moneyextra.com

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