How Does My Defined Benefit Pension Plan Work?

The Defined Benefit Plan used to be the standard for pension plans. Over the last 10 years, many companies have been phasing out these plans in favour of Defined Contribution Plans. Some companies may give you the option of switching between them as well, or converting from one type to another. This article is focused on the Defined Benefit Plan. If you start working for a company today, you will most likely be offered a Defined Contribution Plan unless you work for the public sector, a unionized environment, or a company with a long standing defined benefit plan.

How do I know the difference between the two plans? See the definitions below. The words in bold are terminology you will often see in the discussion of defined benefit pension plans.

Defined Benefit and Defined Contribution Plans Defined

A defined benefit plan is a pension plan where the future payout in retirement is defined by a set formula when you join the company. It is a calculation that usually includes your highest average salary, time working in the company, and how much money was contributed by you and the employer. The money is invested on your behalf and the firm is responsible for risk if something goes wrong. There is usually an implied rate of return that is guaranteed by your employer each year, which is the investment rate of return your money would earn if you could see your pension plan in a bank account.

A defined contribution plan is where the money you pay into the plan is defined: the amount contributed either by you or on your behalf by the company. It is a set dollar amount based on your salary in the year that you are working. You can think of it as the company (and sometimes you and the company) contributing to your pension account. This is similar to a Registered Retirement Savings Plan (RRSP) account, except that it is locked in. Locked in means that the money is in your name and you are entitled to the money, but cannot withdraw it unless there is a very exceptional circumstance. (i.e. this is the only money I have and I need to pay my bills). Also like an RRSP Account, you get to choose the investments in the defined contribution scenario, and you are taking the risks. If you invest in a fund and it loses money, you must deal with the consequences. It is for this reason that it is good to have a plan. If you are in a situation where you have a defined contribution account, you will have to make the decisions.
http://www.xblcodesfree.net
http://www.iferrari.net
http://www.neuthemes.net
http://www.6up024.com
http://www.unknotted-living.com
http://www.wangwenshuju.com
http://www.radiopaisano.net
http://www.dewalt-dw717.com
http://www.theirmustbeaneasierway.com
http://www.dfgbbhggg.com
http://www.goldenpipes.net
http://www.noscrit.net
http://www.hathayogabeneficios.net
http://www.furallefalle.net
http://www.templte-help.com
http://www.superbowl2017live-stream.net
http://www.siberchaqt.net
http://www.modelland-cards.com
http://www.white-smoke.net
http://www.anytimedesign.net
http://www.polyphobia.net
http://www.productsummary.net
http://www.residencianuria-barcelona.com
http://www.gilberthomes85233.com
http://www.solantec.net
http://www.ggobler.com
http://www.wb1302.com
http://www.wb1303.com
http://www.c5g4icfv.com
http://www.wb1306.com
http://www.wb1305.com
http://www.folsomimplantdentistry.com
http://www.0022112.com
http://www.qq8821h.com
http://www.com-live-lo-com.com
http://www.chairloss44.com
http://www.ikt2005.net
http://www.uyghurum.net
http://www.addadventure.net
http://www.my-coloring.net
http://www.sukacagisitesi.com
http://www.hilltopwiththelidoff.com
http://www.3thrones.net
http://www.moitruongphapluancongvn.com
http://www.hatewatach.net
http://www.artedo.net
http://www.mattbinettivideo.com
http://www.applyingnaturalhealth.com
http://www.anthonysroost.com
http://www.shaunatalents.com
http://www.dfive88.net
http://www.stmackenziesgalleries.com
http://www.comdoktersehat.com
http://www.acro-poljanec.com
http://www.formula-aerobaticrace.com
http://www.milking-machines-used.com
http://www.zjgm88.com
http://www.101astudio.com
http://www.021gbing.com
http://www.creamednet.com
http://www.xo900.com
http://www.vikads.com
http://www.brvdc.com
http://www.asiteforsale.com
http://www.demi999.com
http://www.my-internet-dating-advisor.com
http://www.millionmaskmarch2018.com
http://www.isharepassion.com
http://www.nepanglish.com
http://www.mastahponsel.com
http://www.localgroups.in
http://www.getabox.in
http://www.deartrucks.info
http://www.537779.info
http://www.dewedding.info
http://www.368777.info
http://www.viosofas.info
http://www.wprp.info
http://www.591112.info
http://www.ksrg.info
http://www.nwbk.info
http://www.rfmc.info
http://www.viotrucks.info
http://www.kszn.info
http://www.knhb.info
http://www.nswp.info
http://www.395777.info
http://www.rositrucks.info
http://www.violawedding.info
http://www.tgkh.info
http://www.nzsf.info
http://www.lzjp.info
http://www.violahair.info
http://www.viocakes.info
http://www.wbjn.info
http://www.tbhq.info
http://www. twts.info
http://www.595777.info
http://www.629188.info
http://www.383777.info
http://www.281112.info
http://www.571112.info
http://www.yajie.info
http://www.astrukcs.info
http://www.kngb.info
http://www.nhhd.info
http://www.yfml.info
http://www.mjhk.info
http://www.362777.info
http://www.kxdx.info
http://www.kpds.info
http://www.kwqr.info
http://www.xrpt.info
http://www.kwrh.info
http://www.ktcr.info
http://www.aswedding.info
http://www.nwct.info
http://www.kpqz.info
http://www.mdtx.info
http://www.qtzk.info
http://www.lykp.info
http://www.kqbl.info
http://www.fgxp.info
http://www.kgmn.info
http://www.555523.info
http://www.fwsq.info
http://www. hysn.info
http://www.nztd.info
http://www.tyrk.info
http://www.dplj.info
http://www.wlyf.info
http://www.sjhm.info
http://www.bzfn.info
http://www.clqn.info
http://www.kqpl.info
http://www.gnqx.info
http://www.ntbp.info
http://www. 836661.info
http://www.kwxl.info
http://www.yhnc.info
http://www.398777.info
http://www.lyqx.info
http://www.666791.info
http://www.mcyt.info
http://www.rmct.info
http://www.ktkc.info
http://www.wyrp.info
http://www.688812.info
http://www.nxhp.info
http://www.btmn.info
http://www. wppr.info
http://www.lqby.info
http://www.hwjn.info
http://www.yghg.info
http://www.mctx.info
http://www.886661.info
http://www.ygfx.info
http://www.rfpz.info
http://www.579777.info
http://www.896661.info
http://www.nxgb.info
http://www.kghk.info
http://www.mcxb.info
http://www.rknx.info
http://www.wtxr.info
http://www.czhp.info
http://www.dcsk.info
http://www.kmyr.info
http://www.nzyt.info
http://www. rcyg.info
http://www.795388.info
http://www.kcgy.info
http://www.txdt.info
http://www.rfmp.info
http://www.977711.info
http://www.ltpr.info
http://www.655511.info
http://www.lrsx.info
http://www.klcx.info
http://www.561777.info
http://www.335777.info
http://www.wphg.info
http://www.txlz.info
http://www. kqml.info
http://www.952588.info
http://www.lsqb.info
http://www.cztp.info
http://www.ktgb.info
http://www.yhdl.info
http://www.xwfp.info
http://www.962388.info
http://www.918882.info
http://www.386661.info
http://www.333188.info
http://www.331777.info
http://www.551777.info
http://www.568777.info
http://www.591777.info
http://www.953788.info
http://www.353777.info
http://www.ygmx.info
http://www.nxyn.info
http://www.631288.info
http://www.532777.info
http://www.bqmn.info
http://www.ydnt.info
http://www. tzks.info
http://www.kprg.info
http://www.959688.info
http://www. nhsk.info
http://www.sgrq.info
http://www. 866661.info
http://www.616188.info
http://www.btpd.info
http://www. tpgq.info
http://www.wprb.info
http://www.zqkr.info
http://www.cltn.info
http://www.aaktaks.xyz
http://www.tygc.info
http://www.bqyn.info
http://www.nxfx.info
http://www.mtgn.info
http://www.fhpj.info
http://www.sjlr.info
http://www. lyfp.info
http://www.ngsx.info
http://www.rfkx.info
http://www.xtry.info
http://www.ktch.info
http://www.khhm.info
http://www.lrpf.info
http://www.krnf.info
http://www.kwql.info
http://www.373777.info
http://www.392777.info
http://www.lwmj.info
http://www.lzrd.info
http://www.ybjl.info
http://www.ygrd.info
http://www.yflb.info
http://www.klbn.info
http://www.rdxy.info
http://www.kjwl.info
http://www.nrlx.info

Leave a Reply

Your email address will not be published. Required fields are marked *