Pension Plans fall into two major categories: defined benefit plans and defined contribution plans.
Defined benefit plans are traditional plans that promise a certain monthly benefit upon retirement. The employee's retirement income is based on a formula that takes into account factors such as age, earnings, and years of service.
In recent years, most companies have shifted to defined contribution plans. The benefits at retirement are not guaranteed but are based on the funds accumulated in each employees account. Examples of defined contribution plans include:
- Profit-sharing plans
- Money purchase plans
- 401(k) plans
Contact us to learn more about pension plans and how it can help your business attract and retain employees.
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