Taft-Hartley Pension Plan

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Taft-Hartley Pension Plan

A pension plan in which an employer makes fixed contributions to a fund on behalf of employees, who receive a fixed benefit upon retirement. The employer negotiates the amount of the contribution with an employee union, and a third party (consisting of an equal number of representatives of the employer and the union) is responsible for investing contributions. The employer is therefore not responsible for the pension's investment losses, if any. This structure was created in 1947 by the Taft-Hartley Act.