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A pension plan is an employee benefit that commits the employer to making regular contributions to a pool of money set aside to fund payments to eligible employees after they retire.
In Previous years most of the country work on the pattern of the traditional pension plans, that was known as defined-benefit plans. But now-a-days this practice have become increasingly rare. This rare practice are being replaced by defined-contribution plans because this plan come out with less costly to employers. We will discuss many of best information which is equally important for the knowledge foe exam purposes or otherwise. so stay connected with the blog and share the article.
It’s important to an youth to start planning for the saving for his retirement early in your career for the smooth and respectful post retired life. The youth must be understand that the earlier start will get more time to plan for a comfortable retired life. The government employee start their saving for their pension through their employer or at their workplace. But the number of their type of people are handful because only the workers working with the central government, state government or the government of India undertaking get the benefit of automatically contribution for their pension.
A pension plan is an employer’s sponsored retirement saving plan which gives to an employees a leg up on their retirement planning. Unlike other more common retirement plans, they’re sometimes funded primarily by employers and guarantee employees a certain level of income during retirement.
What is a pension?
As per the Department of Labor, “A pension plan is a benefit plan established either by an employer or a employees union or another employees organization to help and financial assurance for their employees retired life.
The pension plans are depending upon the type offered, either –
- it may be guarantee workers a certain income during retirement.
or - it help the workers to defer their income for their retirement plan.
The purpose of a pension plan.
As we already understood that It is in its very core that the pension plan is to help employees save for their retirement. In some of the cases it may be with primarily employer contributions, while in other cases, it may be primarily with employee contributions. But those contributions, paired with investment growth, can help provide a comfortable retirement for plan participants.
The availebility of the monrtary fund in the form of your pension is the principal source of income after retirement to live smooth and respected life. This is directly proportional to the amount of money you saved up before retirement. So, this set of articles will cover everything you need to learn about what pension plan is, define pension, and much more. Keep reading the blog.
Next Important Articles Must Read
01) Categories of the Pension and Difference Between Defined Contributory Pension Plan & Defined Benefit Pension Plan
02) Types of Pension Schemes,
03) Different Kind of Pension Beneficiaries,
04) What is Old Pension scheme (OPS), When did the Old Pension Scheme stop and why? and Feature of Old Pension Scheme (OPS).
05) What is New Pension Scheme (NPS), When did the NPS start? and Feature of New Pension Scheme (NPS).
06) What is Unified Pension Scheme?, Feature of Unified Pension Scheme (UPS). and When will the UPS implemented?
07) Difference between OPS, NPS and UPS.
08) What is the government’s intention to introduce UPS in the country?
09) What are the problems being considered by the experts in the Unified Pension Scheme?