Pension
- is an arrangement to provide people with an income when they are no longer earning a regular income from employment. - it should not be confused with severance pay.
Difference: pension is paid in one lump sum. severance pay - is paid in regular installments
Pension
is to describe the payments a person receives upon retirement, usually under predetermined legal and/or contractual terms.
pensioner or retiree - is the recipient of a retirement pension
Retirement Plan
refer to a pension granted upon retirement.
may be set up by employers, insurance
companies
other terms: pension schemes in the UK superannuation plans in Australia and New Zealand
occupational or employer pension - a pension created by an employer for the benefit of an employee - a form of deferred compensation deferred compensation - is an arrangement in which a portion of an employee's income is paid out at a date after which that income is actually earned. tax-deferred not paying the tax until the money is distributed, usually upon retirement.
Payout Options
two payout options as a lump sum gives immediate control of the whole amount as monthly payments can offer the benefit of guaranteed income for life.
** The larger the group of employees, the lower the cost to both employers and employees.
Advantages
provide employees opportunities for a
better return on their retirement investment. payments are automatically deducted from the paycheck which encourages savings.
Disadvantages
An employee do not control how much the
employer contributes and the types of savings options within the plan. traditional pension plans are not transferrable. Some retirement plans permits an employee to take the funds he contributed and any interest earned on those funds if he leave the company. However, if the employee leave before a designated number of years, he will receive none of the contributions made by the employer.
Types of Plans
Employer-Sponsored Retirement
Diversify
options on how retirement funds are invested for growth, income, and capital preservation.
distributed or withdrawn
Pension plans
also called define-benefit plans determines how much a person is going to be paid.
resulting from sickness, maternity, death, invalidity, old age and unemployment, the provision of medical care and the provision of child allowance. The insured person is the employee who starts working at the age of not under 15 and not over 60 years old in the enterprise with 1 or more employees.
1. Social Security Card The insured person will receive the Social Security Card after registration for 5 days (not including the period spending by post.) 2. Medical Card The insured persons will receive the Medical Card after registration and pay contribution for 3 months.
Benefits:
sickness or injuries free of charge at the registered hospital and cash benefits due to sick leave
- pay for not less than 3 months within 15 months invalidity medical treatment and cash benefit
- not less than 12 months within 36 months Maternity not less than 7months within 15 months child allowance not less than a yr within 36 months old-age not less than 180 months, 55 yrs old
End
Of
Chapter 5