Pension Plan

A pension plan is an employee benefit that obligates the employer to make regular contributions to a pool of money that is set aside to fund post-retirement disbursements to eligible employees.

A pension plan is a retirement plan that requires employer contributions to a pool of funds left aside for the future benefit of the employee.

There are two primary categories of pension plans: defined contribution and defined benefit.

A defined benefit plan ensures a fixed lifetime monthly payment (or a lump sum payment on retiring).

A defined contribution plan establishes an investment account that develops over the course of an employee’s career. The employee has access to the balance upon retirement