What is a Pension?
A retirement account that an employer maintains to give you a fixed payout when you retire.
Defined Benefit Pension Plan is a type of pension plan in which an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earning history, tenure of service, and age rather than depending directly on individual investment returns.
The liability of the pension lies with the employer/sponsor that is responsible for making the decisions.
If an employee leaves the company before retirement, the benefits earned so far are frozen and held in a trust for the employee until retirement age or in some instances the employee is able to take away a lump sum value or transfer the value to another pension plan.
Because Employee Benefit Plans are highly regulated entities, special requirements and responsibilities apply. GLO CPAs is incredibly well-informed and experienced in handling defined pension plans and can help you with your plan.
“Defined Benefit Pension Plans” allow earnings to be taxed at a future time and used in a comprehensive way for estate planning. Let us show you how one can benefit you.
