Pension Terms
There are many terms and definitions within the area of pensions. Some of these terms may be used by a Phoenix personal injury attorney. They include:
· Pension Benefit Guaranty Corp.- An organization that generally sources its money from insurance premiums paid by pension plans it covers, but sometimes turns to the federal government for money when needed, i.e. it insures many pension plans and is a half public and half private entity.
· Defined contribution plan - The employer promises to pay a certain amount in the employee's retirement account while the employee is working, but does not promise a specific amount of income for the employee after retirement. Defined contribution plans can take several different forms, including 401(k) plans, through which your employer and employee may contribute jointly to retirement savings.
· Defined benefit plan- This is generally where the employer promises to pay the employee a fixed amount of money after the employee retires.
· Integrated plan - This approach usually allows employers who sponsor their own pension plans to take credit for the fact that their FICA contributions on behalf of lower income workers buy proportionately more generous benefits than their contributions for higher income workers. When a pension plan is integrated with Social Security, the actual monthly or yearly pension benefit is reduced by the Social Security check.
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