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Old 26.08.2021, 12:09
jim1 jim1 is offline
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Re: Pillas: Employed vs Independent vs Both

I agree with HVF and would take the same approach as he recommends. Just to point out other differences, the right solution may depend on your personal circumstances

-In 2P your employer pays into the scheme as well as you and the contribution is not normally included in quoted salary figures

-2P may offer generous insurance against death or invalidity, 3P doesn't -but the 2P plan may charge you for this

-If you retire whilst still in a 2P plan you can choose have an annuity at the end (e.g. 5% of saved amount per year for life) which is not possible with 3P. So with 3P you assume the risk of investment return and need to budget accordingly

-2P may be lower return but it is usually also lower risk since backed by an employer and invested in lower risk assets

Another factor is that if you are employed you pay into unemployment insurance and then are entitled to benefits from the insurance scheme if you lose your job
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