More About Pension Plans More About Pension PlansDefined benefit pension plans promise a pension based on a defined formula. This could be a formula based on years of service, hours worked or some other predetermined calculation. A defined contribution pension plan bases the pension on the earnings of the invested contributions. Whatever these contributions earn over the life of the plan are used to buy a retirement income via a purchased annuity.
In the case of a defined benefit plan, sponsors are legally required to set aside enough money to cover the pension promise that has been made. Legislation requires that an Actuary perform actuarial valuations at least every three years to establish the solvency of the plan. The valuation calculates the present value of the assets and liabilities of a plan, according to specified demographic and return assumptions.
Defined Benefit Pension Plans
Defined Contribution Pension Plans
Pension Fund Investments
Pension Industry Professionals
Government Regulation of Pension Plans
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