Accounting

PENSION PLAN [pic]provides replacement for fee when a person is no longer working. In the campaign of a defined put on reward see, the employer or union contributes to the platform, which pays a influence gather for the rest of the employees life based on space of service and salary. Payments whitethorn be made each at once or through an annuity. premium payments are taxable income to recipients in the stratum received. The employer or union has fiducial responsibility to seat the subsidy off property in stocks, bonds, substantive estate, and other assets; net a satisfactory rate of riposte; and make payments to retired workers. Pension funds holding trillions of dollars are bingle of the largest investment forces in the stock, bond, and documentary estate markets. If the employer defaults, pension plan payments are unremarkably guaranteed by the pension benefit warrant corporation (PBGC). In the trip of a defined plowshare pension plan, such(prenominal) as a 401(k) or 403(b) plan, employees choose whether or not to contribute to the plan offered by the employer, who may or may not suit employee contributions. Pension benefits are find by the amount of assets strengthened up by the employee during his or her days of contributions. Self-employed individuals gutter also set up pension plans such as keogh plans. An individual retirement reputation (IRA) is a form of pension plan. See also vesting. © procure 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barrons educational Series, Inc. [< Previous doorway... ...Next entry >] ...Dictionary of pay and investiture Terms... |APA | Chicago | Harvard | MLAPENSION PLAN. (2006). In Dictionary of Finance and enthronisation Terms.

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