Accounting

PENSION PLAN [pic]provides replacement for salary when a soul is no longer working. In the case of a delineate put on reward plan, the employer or f tidy sum uprnity contributes to the plan, which pays a predetermined gather for the rest of the employees life establish on space of service and salary. Payments whitethorn be do either at once or through an annuity. reward payments be taxable income to recipients in the year received. The employer or union has fiduciary responsibility to seat the gift funds in stocks, bonds, real estate, and other assets; net a satisfactory rate of return; and make payments to retired workers. Pension funds holding trillions of dollars be one of the largest investment forces in the stock, bond, and real estate markets. If the employer defaults, pension plan payments are unremarkably guaranteed by the pension gather guaranty corporation (PBGC). In the case of a be contribution pension plan, such(prenominal) as a 401(k) or 403(b) pla n, employees consider whether or not to contribute to the plan offered by the employer, who may or may not match employee contributions. Pension benefits are determined by the amount of assets built up by the employee during his or her days of contributions. Self-employed individuals can to a fault set up pension plans such as keogh plans. An individual solitude account (IRA) is a form of pension plan. See also vesting. © Copyright 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barrons Educational Series, Inc. [< Previous admittance... ...Next entry >] ...Dictionary of finance and investiture Terms... |APA | Chicago | Harvard | MLAPENSION PLAN. (2006). In Dictionary of Finance and Investment Terms.

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