In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment.[1] It is a tax deferred savings vehicle that allows for the tax-free accumulation of a fund for later use as a retirement income. Pensions should not be confused with severance packages A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:; the former is paid in regular installments, while the latter is paid in one lump sum.
The terms retirement plan or superannuation refer to a pension granted upon retirement Retirement is the point where a person stops employment completely .. A person may also semi-retire by reducing work hours. Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don't allow the person to work any more (by illness or accident). In most.[2] Retirement plans may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions. Called retirement plans in the USA, they are more commonly known as pension schemes in the UK and Ireland and superannuation plans in Australia and Trinidad and Tobago Police Service. Retirement pensions are typically in the form of a guaranteed life annuity A life annuity is a financial contract in the form of an insurance product according to which a seller —typically a financial institution such as a life insurance company—makes a series of payments in the future to the buyer (annuitant) in exchange for the immediate payment of a lumpsum (single-payment annuity) or a series of regular payments (, thus insuring against the risk Risk concerns the expected value of one or more results of one or more future events. Technically, the value of those results may be positive or negative. However, general usage tends focus only on potential harm that may arise from a future event, which may accrue either from incurring a cost or by failing to attain some benefit ("upside of longevity The word "longevity" is sometimes used as a synonym for "life expectancy" in demography. However, this is not the most popular or accepted definition. For the general public as well as writers, the word generally connotes "long life", especially when it concerns someone or something lasting longer than expected.
A pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pension. Labor unions A trade union is an organization of workers who have banded together to achieve common goals in key areas, such as working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members (rank and file members) and negotiates labor contracts (Collective bargaining) with employers. This may include the, the government, or other organizations may also fund pensions. Occupational pensions are a form of deferred compensation Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which that income is actually earned. Examples of deferred compensation include pensions, retirement plans, and stock options. The primary benefit of most deferred compensation is the deferral of tax to the date at which the employee, usually advantageous to employee and employer for tax To tax is to impose a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law reasons. Many pensions also contain an additional insurance Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating aspect, since they often will pay benefits to survivors or disabled beneficiaries. Other vehicles (certain lottery A lottery is a form of gambling which involves the drawing of lots for a prize. Some governments outlaw it, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments payouts, for example, or an annuity A life annuity is a financial contract in the form of an insurance product according to which a seller —typically a financial institution such as a life insurance company—makes a series of payments in the future to the buyer (annuitant) in exchange for the immediate payment of a lumpsum (single-payment annuity) or a series of regular payments () may provide a similar stream of payments.
The common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms. A recipient of a retirement pension is known as a pensioner In common parlance, a pensioner is a person who has retired, and now collects a pension. This is a term typically used in the United Kingdom and Australia where someone of pensionable age may also be referred to as an 'old age pensioner', or OAP. In the United States, the term retiree is more common. In many countries, increasing life expectancy or retiree.
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Key Retirement Solutions
The Pensions Regulator has issued a warning for workers who are currently saving into a final salary scheme. According to a report from the organisation, ...
Pension transfer 'inducements' warning BBC News
Warning over pension lump sums Financial Times
Pensions transfer sweetners under scrutiny Telegraph.co.uk
The Press Association - Banking Times - FinancialAdvice.co.uk
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