What is a pension exactly?

Question

What is a pension exactly?

Answer 1

A pension is a steady income given to a person (usually after retirement). Pensions are typically payments made in the form of a guaranteed annuity to a retired or disabled employee. Some retirement plan (or superannuation) designs accumulate a cash balance (through a variety of mechanisms) that a retiree can draw upon at retirement, rather than promising annuity payments. These are often also called pensions. In either case, a pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pension. Labor unions, the government, or other organizations may also fund pensions.

Answer 2

My understanding is it's pulled out of your wages while you are actively working so you can receive it when you retire. It's really not much to live on but lt's something. That's why you should take out a 401k plan because for like every 2 or 3 dollars they will add like a dollar and that will pay off in the long run and give you security.

Answer 3

it's another wage paid regularly for your needs in compensation for previous services such as helping out or making findings. basically it's another addon to your salary

if you still don't get it theres always dictionary.com or the encyclopedia, goodluck!

Answer 4

Legally known as a defined benefit plan, it is sponsored by an employer who is required to fund it to actuarially determined funding levels.  The benefit paid to you at retirement (usually at age 65), is generally based on your salary and years of service.  The employee does not contribute to this plan, unlike the 401(k), the other popular retirement savings plan, also called a defined contribution plan.  Defined benefit plans (pension plans) are becoming much less popular with employers these days, because the funding requirements are much more expensive for companies and costs on a year-to-year basis are harder to predict