Pension

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Pension

A retirement plan in which an employer makes a contribution into an account each month. The contributions are invested on behalf of an employee, who may begin to make withdrawals after retirement. Typically, pensions are tax-deferred, meaning that the employee does not pay taxes on the funds in the pension until he/she begins making withdrawals. Pensions may have defined contributions, defined benefits, or both. See also: 401(k), IRA.

Pension.

A pension is an employer plan that's designed to provide retirement income to employees who have vested -- or worked enough years to qualify for the income.

These defined benefit plans promise a fixed income, usually paid for the employee's lifetime or the combined lifetimes of the employee and his or her spouse.

The employer contributes to the plan, invests the assets, and pays out the benefit, which is typically based on a formula that includes final salary and years on the job.

You pay federal income tax on your pension at your regular rate, so a percentage is withheld from each check. If the state where you live taxes income, those taxes are withheld too. However, you're not subject to Social Security or Medicare withholding on pension income.

In contrast, the retirement income you receive from a defined contribution plan depends on the amounts that were added to the plan, the way the assets were invested, and their investment performance.

The way a particular plan is structured determines if you, your employer, or both you and your employer contribute and what the ceiling on that contribution is.

pension

a payment received by individuals who have retired from paid employment or have reached the government's pensionable age, in the form of a regular weekly or monthly income, or as a lump sum. There are three main types of pension scheme:
  1. state retirement pensions operated by he Government, whereby the employee pays NATIONAL INSURANCE CONTRIBUTIONS over his working life, giving entitlement to an old age pension on retirement of an amount considered to provide some minimum standard of living. State pensions may be based on earnings or may be a flat rate, or combination of the two. See DEPARTMENT FOR WORK AND PENSIONS;
  2. occupational pensions operated by private sector employers whereby the employee and the employer each make regular contributions to a PENSION FUND or INSURANCE COMPANY scheme, the pensioner then receiving a pension which is related to the amount of his contributions (annual contributions x number of years worked).

    Occupational pensions take two main forms:

    1. defined benefit, where the pension is linked to final salary. Here the employer is liable to make up any shortfalls in the PENSION FUND. This type of scheme is also known as a ‘final salary’ scheme.
    2. defined contribution, or money purchase scheme, where the size of contributions but not the final pensions benefits are fixed. The size of pension benefits are determined by the investment performance of the fund. The employee rather than the employer bears the risk.

    In the UK there is a shift from defined benefit to defined contribution schemes, because of employer fears about their future liabilities;

  3. personal pension plans (PPP) operated by insurance companies, pension funds and other financial institutions which provide ‘customized’ pension arrangements for individuals depending on their personal circumstances. Since a PPP scheme is not tied to a particular employer the problem of transferring pension rights should the person move jobs is much reduced. A recent innovation in the UK is the ‘stakeholder pension’, aimed at low and medium income earners who work for employers who do not already have an occupational scheme. Employers with more than 5 employees are obliged to designate a ‘stakeholder pension’ provider for their workforce but they are under no obligation to make contributions to the scheme. Nor are employees obliged to subscribe. Approved providers of stakeholder pensions are required to levy low charges to participants. See CONTRACTING OUT.

pension

a payment, received by individuals who have retired from paid employment or who have reached the government's pensionable age, in the form of a regular weekly or monthly income or paid as a lump sum. There are three main types of pension scheme:
  1. state retirement pensions, operated by the government, whereby the employee pays NATIONAL INSURANCE CONTRIBUTIONS over his or her working life, giving entitlement to an old-age pension on retirement of an amount considered to provide some minimum standard of living;
  2. occupational pensions, operated by private sector employers, whereby the employee and employer each make regular contributions to a PENSION FUND or INSURANCE COMPANY scheme, the pensioner then receiving a pension that is related to the amount of his or her contributions (annual contributions x number of years worked);personal pension plans (PPP), operated by insurance companies, pension funds and other financial institutions, that provide ‘customized’ pension arrangements for individuals depending on their personal circumstances. Since a PPP scheme is not tied to a particular employer, the problem of transferring pension rights should the person move job is much reduced.

Pension

Payments made periodically of (generally) a definite amount for a specified period (usually life) from an employer-funded plan to workers who have met the stated requirements. Its primary purpose is to provide retirement income.
References in periodicals archive ?
Ombudsman Punjab, on the basis of inquiry report of Wazir Ahmad Qureshi, ordered of inclusion of Secretariat/Personal Allowance in pensionable emoluments of pensioners who had been given Personal Allowance from 1994 to 2001 as a part of their salaries.
The commission concluded against the introduction of a cap on pensionable earnings given the associated increase in complexity and the reduction in cash flow to Government revenue caused by the loss of contributions on earnings above any such cap.
Still, at least the not-as-older women are more likely to be able to play an active role in their children's lives than the pensionable male.
The company intends to cap pensionable future pay rises and promotions at 2 per cent which will erode workers' pensions over time.
Envious that firefighters and sheriff's employees get longevity bonuses that periodically boost employees' salaries and their pensionable incomes as they near retirement, social workers also sought longevity bonuses -- which now total up to 6 percent.
Today's free-entry offer for senior citizens - "those of state pensionable age," the track helpfully points out for anyone in doubt about qualification - is a marketing ploy that could be taken a few stages further in the future.
Dairy Crest Scheme design--defined benefit Contracted out--yes Pensionable age--65 Members--5,500 Current pensioners--5,400 Market valuation--496m [pounds sterling] Somerfield Scheme design--defined benefit/defined contribution Type--segregated fund Contracted out--yes and no Pensionable age--Somerfield will continue paying contributions up to the age of 70.
The bills would also gradually raise the pensionable age for pension payments decided according to salaries earned while working, to 65 from the current 60 between fiscal 2013 and fiscal 2025.
Fonteyn and Helpmann with the Royal Ballet throughout the 1950s; a young Danish dancer named Peter Martins making his debut with New York City Ballet in 1969; a pensionable Alicia Alonso dancing Giselle in a tent (and a torrential downpour) in 1979: The Edinburgh International Festival has certainly had its share of landmark dance performances during its distinguished forty-nine-year history.
2 million people of pensionable age, accounting for 19.
Pensionable age Both men may both be approaching pensionable age, yet if their manner appears old school they have both made a fine fist of modernising their respective national sides.
Those of pensionable age will not be affected, however the introduction of this Bill is going to cause massive upheaval, disruption and increased financial difficulties.