query: who makes contributions to a defined benefit plan

pos: Defined benefit pension plan and known in advance. Conversely, for a "defined contribution retirement saving plan", the formula for computing the employer's and employee's contributions is defined and known in advance, but the benefit to be paid out is not known in advance. In the United States, specifies a defined benefit plan to be any pension plan that is not a defined contribution plan, where a defined contribution plan is any plan with individual accounts. A traditional pension plan that "defines" a "benefit" for an employee upon that employee's retirement is a defined benefit plan. The most common type of formula used is based

pos: Defined benefit pension plan the U.S. currently do not have contribution limits. The liability of the pension lies with the employer/sponsor who is responsible for making the decisions. Employer and/or employer/employee contributions to a defined benefit pension plan are based on a formula that calculates the contributions needed to meet the defined benefit. These contributions are actuarially determined taking into consideration the employee's life expectancy and normal retirement age, possible changes to interest rates, annual retirement benefit amount, and the potential for employee turnover. Each jurisdiction would have legislation which has requirements and limitations for administering pension plans. Entitlements and limitations may also be

pos: Defined benefit pension plan and known in advance. Conversely, for a "defined contribution retirement saving plan", the formula for computing the employer's and employee's contributions is defined and known in advance, but the benefit to be paid out is not known in advance. In the United States, specifies a defined benefit plan to be any pension plan that is not a defined contribution plan, where a defined contribution plan is any plan with individual accounts. A traditional pension plan that "defines" a "benefit" for an employee upon that employee's retirement is a defined benefit plan. The most common type of formula used is based

pos: Pension Defined contribution plans have become widespread all over the world in recent years, and are now the dominant form of plan in the private sector in many countries. For example, the number of defined benefit plans in the US has been steadily declining, as more and more employers see pension contributions as a large expense avoidable by disbanding the defined benefit plan and instead offering a defined contribution plan. Money contributed can either be from employee salary deferral or from employer contributions. The portability of defined contribution pensions is legally no different from the portability of defined benefit plans. However,

pos: Defined benefit pension plan amount of their pension obligations. Contributions may be made by the employee, the employer, or both. In many defined benefit plans the employer bears the investment risk and can benefit from surpluses. When participating in a defined benefit pension plan, an employer/sponsor promises to pay the employees/members a specific benefit for life beginning at retirement. The benefit is calculated in advance using a formula based on age, earnings, and years of service. In the United States, the maximum retirement benefit permitted in 2014 under a defined benefit plan is $210,000 (up from $205,000 in 2013). Defined benefit pension plans in

pos: Defined contribution plan as a large expense avoidable by disbanding the defined benefit plan and instead offering a defined contribution plan. Money contributed can either be from employee salary deferral or from employer contributions. The portability of defined contribution plans is legally no different from the portability of defined benefit plans. However, because of the cost of administration and ease of determining the plan sponsor's liability for defined contribution plans (no actuary is needed to calculate the lump sum equivalent unlike for defined benefit plans), in practice, defined contribution plans have become generally portable. In a defined contribution plan, investment risk and investment

pos: Cash balance plan Code's definition for defined benefit plans are all plans that are not defined contribution plans. Cash balance plans are defined-benefit plans that look like defined-contribution plans. A worker's right to a pension in a defined-benefit plan represents a contingent and hence uncertain financial obligation to the employer sponsoring the plan. Section 412 of the Code requires the employer to make annual contributions to the plan to ensure that the plan assets will be sufficient to pay the promised benefits later at retirement. As part of this process the plan is required to have an actuary perform annual "actuarial valuations" in

pos: Retirement plans in the United States with the funds contributed to the account. Some types of retirement plans, such as cash balance plans, combine features of both defined benefit and defined contribution schemes. According to Internal Revenue Code Section 414, a defined contribution plan is an employer-sponsored plan with an individual account for each participant. The accrued benefit from such a plan is solely attributable to contributions made into an individual account and investment gains on those funds, less any losses and expense charges. The contributions are invested ("e.g.", in the stock market), and the returns on the investment are credited to or deducted from the

pos: Defined benefit pension plan is no guarantee that a given level of contributions will be enough to meet the benefits. Typically, the contributions to be paid are regularly reviewed in a valuation of the plan's assets and liabilities, carried out by an actuary to ensure that the pension fund will meet future payment obligations. This means that in a defined benefit pension, investment risk and investment rewards are typically assumed by the sponsor/employer and not by the individual. If a plan is not well-funded, the plan sponsor may not have the financial resources to continue funding the plan. For example, the United States Social

pos: Defined benefit pension plan than defined contribution plans, even if the plan allows a lump sum cash benefit at termination. Most plans, however, pay their benefits as an annuity, so retirees do not bear the risk of low investment returns on contributions or of outliving their retirement income. The open-ended nature of these risks to the employer is the reason given by many employers for switching from defined benefit to defined contribution plans over recent years. However the investment returns can exceed the actuarial estimate. Employees do not benefit from the resulting surplus. The risks to the employer can sometimes be mitigated by discretionary

pos: State Universities Retirement System of time they are automatically enrolled in the traditional plan. Until 1998 it was the only SURS plan available. It provides lifetime retirement benefits and provides for a survivor benefit at no additional cost. This is also a Defined Benefit retirement plan that has much in common with the Traditional Benefit Package. However, it provides a more generous separation refund if you leave the system. But the provisions for survivor benefits require a reduction to the retirement and death benefits. This is a Defined Contribution plan that establishes an account in your name into which your contributions and the employer

pos: Pension because the employer tends to pay higher contributions than under defined contribution plans), so such criticism is rarely harsh. The "cost" of a defined benefit plan is not easily calculated, and requires an actuary or actuarial software. However, even with the best of tools, the cost of a defined benefit plan will always be an estimate based on economic and financial assumptions. These assumptions include the average retirement age and lifespan of the employees, the returns to be earned by the pension plan's investments and any additional taxes or levies, such as those required by the Pension Benefit Guaranty Corporation

pos: Defined benefit pension plan on the employee's terminal earnings (final salary). Under this formula, benefits are based on a percentage of average earnings during a specified number of years at the end of a worker's career. In the private sector, defined benefit plans are often funded exclusively by employer contributions. For very small companies with one owner and a handful of younger employees, the business owner generally receives a high percentage of the benefits. In the public sector, defined benefit plans usually require employee contributions. Over time, these plans may face deficits or surpluses between the money currently in their plans and the total

pos: State Board of Administration of Florida rebate in required employer contributions to the FRS when the fund is more than 100% funded, and mandates employers contributions in excess of normal required contributions to make up any unfunded liability when the fund is less than 100% funded. The Florida Retirement System (FRS) Investment Plan was established by the Legislature to provide Florida's public employees with a portable, flexible alternative to the FRS traditional defined benefit plan. Since opening its first employee account roughly nine years ago, the FRS Investment Plan has become one of the largest optional public-sector defined contribution retirement plans in the US. The objective

pos: Retirement plans in the United States Code Section 415 limits on how much can be contributed. As of 2015, the total deferral amount including the employee and employer contribution is the lesser of $53,000 or 100% of compensation. The employee-only amount is $18,000 for 2015, but a plan can permit participants who are age 50 or older to make "catch-up" contributions of up to an additional $6,000. Commonly referred to as a pension in the US, a defined benefit plan pays benefits from a trust fund using a specific formula set forth by the plan sponsor. In other words, the plan "defines a benefit" that will

pos: Retirement plans in the United States of receiving the benefit as a life annuity. The amount of the annuity benefit must be "definitely determinable" as per IRS regulation 1.412-1. Defined benefit plans may be either "funded" or "unfunded". In a funded plan, contributions from the employer and participants are invested into a trust fund dedicated solely to paying benefits to retirees under a given plan. The future returns on the investments and the future benefits to be paid are not known in advance, so there is no guarantee that a given level of contributions will meet future obligations. Therefore, fund assets and liabilities are regularly reviewed

pos: Defined benefit pension plan The basic premise behind most rules are that an employer cannot use a qualified pension plan to give highly paid employees (or owners) a lot of money through a qualified plan (through this tax advantaged financial instrument). Because pensions or defined benefit plans are limited in the amount of money contributed and distributed to be eligible for tax deductions (for example as of 2013 annual contributions to 401(k) plans are limited to $17,500), firms have created something called supplemental executive retirement plans or SERPs for their executives. As of 2002, some 70% of firms surveyed provided non-qualifying SERPs to their

pos: Employee Retirement Income Security Act of 1974 of service before an employee's benefit became vested. It was not unusual for a plan to provide no benefit at all to an employee who left employment before the specified retirement age (e.g. 65), regardless of the length of the employee's service. Under the Pension Protection Act of 2006, employer contributions made after 2006 to a defined contribution plan must become vested at 100% after three years or under a 2nd-6th year gradual-vesting schedule (20% per year beginning with the second year of service, i.e. 100% after six years). (ref. 120 Stat. 988 of the Pension Protection Act of 2006.)

pos: Employee Retirement Income Security Act of 1974 The Technical Explanation of H.R.4, of the PPA, Page 156 Vesting Rules, states that the PPA amends both the ERISA and Code. Different rules apply with respect to employer contributions made before 2007. Employee contributions are always 100% vested. Accrued benefits under a defined benefit plan must become vested at 100% after five years or under a 3rd-7th year gradual vesting schedule (20% per year beginning with the third year of vesting service, and 100% after seven years). (ref. 26 U.S.C. 411(a)(1)(B), 29 U.S.C. 203(a)(2).) ERISA established minimum funding requirements for pension plans, which includes defined benefit plans and money

pos: Public employee pension plans in the United States Public employee pension plans in the United States In the United States, public sector pensions are offered by federal, state and local levels of government. They are available to most, but not all, public sector employees. These employer contributions to these plans typically vest after some period of time. These plans may be defined-benefit or defined-contribution pension plans, but the former have been most widely used by public agencies in the U.S. throughout the late twentieth century. Some local governments do not offer defined-benefit pensions but may offer a defined contribution plan. In many states, public employee pension plans are

pos: Pension the US, specifies a defined benefit plan to be any pension plan that is not a defined contribution plan (see below) where a defined contribution plan is any plan with individual accounts. A traditional pension plan that "defines" a "benefit" for an employee upon that employee's retirement is a defined benefit plan. In the U.S., corporate defined benefit plans, along with many other types of defined benefit plans, are governed by the Employee Retirement Income Security Act of 1974 (ERISA). In the United Kingdom, benefits are typically indexed for inflation (known as Retail Prices Index (RPI)) as required by law

pos: Defined benefit pension plan that will provide a predetermined amount at retirement, usually in the form of a lump sum. "A cash balance plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines the promised benefit in terms of a stated account balance." Defined benefit pension plan A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement that is predetermined by a formula based on the employee's earnings history,

pos: Defined benefit pension plan Defined benefit pension plan A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provided defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay. A defined benefit plan is 'defined' in the sense that the benefit formula is defined

pos: Financial gerontology DC plans, it is only the "input" of contributions into the pension plan that is defined or guaranteed in advance. In many DC plans the employee contributes a specified amount (or percentage) to his/her pension account and the employer matches the amount (in some cases only the employee or only the employer make the contributions). In all these cases, however, the later-life "output" of money to the retiree is based on how well, how successful, the contributed funds have been invested. The magnitude of changes in wealth span complexity precipitated by the shift from Defined Benefit to Defined Contribution plans

pos: Defined benefit pension plan have been employed for ten years or leave their employer. Employees who reach age 65 or the specified retirement age in their plan can also collect the benefits. Starting in 2002, the maximum benefit is now reduced for retirement prior to age 62, and increased for retirement after age 65. In the U.S., a defined benefit plan cannot force you to receive your benefits before normal retirement age. However, if the lump sum value of your benefit is less than $5,000, and you are vested, then the plan may simply pay your benefit as a lump sum soon after termination.

pos: Employee Retirement Income Security Act of 1974 survivor coverage. The Pension Benefit Guaranty Corporation was established by ERISA to provide coverage in the event that a terminated defined benefit pension plan does not have sufficient assets to provide the benefits earned by participants. Later amendments to ERISA require an employer who withdraws from participation in a multiemployer pension plan with insufficient assets to pay all participants' vested benefits to contribute the "pro rata" share of the plan's unfunded vested benefits liability. There are two main types of pension plans: defined benefit plans and defined contribution plans. Defined benefit plans provide retirees with a certain level of benefits

pos: Defined contribution plan to manage the contributions received from its employees. Defined contribution plan A defined contribution (DC) plan is a type of retirement plan in which the employer, employee or both make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts (through employee contributions and, if applicable, employer contributions) plus any investment earnings on the money in the account. In defined contribution plans, future benefits fluctuate on the basis of investment earnings. The most common type of defined contribution plan is a savings and thrift plan. Under this

pos: Pension to be paid, are not known in advance, so there is no guarantee that a given level of contributions will be enough to meet the benefits. Typically, the contributions to be paid are regularly reviewed in a valuation of the plan's assets and liabilities, carried out by an actuary to ensure that the pension fund will meet future payment obligations. This means that in a defined benefit pension, investment risk and investment rewards are typically assumed by the sponsor/employer and not by the individual. If a plan is not well-funded, the plan sponsor may not have the financial resources to

pos: Cash balance plan Cash balance plan A cash balance plan is a defined benefit retirement plan that maintains hypothetical individual employee accounts like a defined contribution plan. The hypothetical nature of the individual accounts was crucial in the early adoption of such plans because it enabled conversion of traditional plans without declaring a plan termination. The employees' accounts earn a fixed rate of return that can change over a period of time from year to year. Although it works much like a defined-contribution plan, it is actually a defined-benefit plan for legal purposes. In 2003, over 20% of US workers with defined benefit

pos: Defined contribution plan Defined contribution plan A defined contribution (DC) plan is a type of retirement plan in which the employer, employee or both make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts (through employee contributions and, if applicable, employer contributions) plus any investment earnings on the money in the account. In defined contribution plans, future benefits fluctuate on the basis of investment earnings. The most common type of defined contribution plan is a savings and thrift plan. Under this type of plan, the employee contributes a predetermined

pos: Keogh Plan after retirement depends on how much they invested in the plan while they worked. The defined-benefits plan is more complex. It relies on an IRS formula to calculate the rate of contributions. In either case, as in other retirement plans such as 401(k)s and IRAs, the funds in the plan can be invested in stocks, bonds, mutual funds, etc. The main benefit of a Keogh Plan vs. other retirement plans is that a Keogh Plan has higher contribution limits for some individuals. For 2011, employees can generally contribute up to $16,500 per year, and the employer can contribute up to

pos: Canada Pension Plan of the workforce that was covered by an employer defined-benefit pension plan, which had fallen from 48% of men in 1971 to 25% by 2011. They were given additional impetus by moves on the part of the government of Ontario to launch the Ontario Retirement Pension Plan, a supplementary provincial pension plan intended to begin in 2018. Unlike the existing, or base, CPP, the enhancement to the Canada Pension Plan will be fully funded, meaning that benefits under the enhancement will slowly accrue each year as individuals work and make contributions. Additionally, the enhancement of the Canada Pension Plan will

pos: Middle-class squeeze all for their retirement and of those who have started saving, more than half claim to have saved less than $25,000. There has also been a shift in employer retirement plans, with a shift from traditional defined benefit pension plans to 401k plans, in which there is no individual guarantee about the amount of retirement income that will be available. The percentage of workers covered by a traditional defined benefit (DB) pension plan declined steadily from 38% in 1980 to 20% in 2008. Employees in unions are more likely to be covered by a defined benefit plan, with 67% of

pos: Cash balance plan conversion the cash balance plan would provide lower benefits for most workers than if the defined-benefit plan had remained unchanged and the worker had stayed in their job until retirement age. This decline in benefits tends to be largest for older workers. This is because in a traditional plan, where benefits are based on final average pay, the "value" of the benefits accrues much faster for older workers than for younger workers. In contrast, in a DC or cash balance plan, contributions are made at the same rate (by workers in the DC plans and by the employer in the

pos: Social Security (United States) Security is more similar to a defined benefit pension plan. In a defined benefit pension plan, the benefits ultimately received are based on some sort of pre-determined formula (such as one based on years worked and highest salary earned). Defined benefit pension plans generally do not include separate accounts for each participant. By contrast, in a defined contribution pension plan each participant has a specific account with funds put into that account (by the employer or the participant, or both), and the ultimate benefit is based on the amount in that account at the time of retirement. Some have proposed

pos: Defined benefit pension plan administered by institutions which exist specifically for that purpose, by large businesses, or, for government workers, by the government itself. A traditional form of a defined benefit plan is the "final salary" plan, under which the pension paid is equal to the number of years worked, multiplied by the member's salary at retirement, multiplied by a factor known as the "accrual rate". The final accrued amount is available as a monthly pension or a lump sum. The benefit in a defined benefit pension plan is determined by a formula that can incorporate the employee's pay, years of employment, age at

pos: Pension the plan. A defined contribution plan will provide a payout at retirement that is dependent upon the amount of money contributed and the performance of the investment vehicles utilized. Hence, with a defined contribution plan the risk and responsibility lies with the employee that the funding will be sufficient through retirement, whereas with the defined benefit plan the risk and responsibility lies with the employer or plan managers. Some types of retirement plans, such as "cash balance" plans, combine features of both defined benefit and defined contribution plans. They are often referred to as "hybrid" plans. Such plan designs have

pos: Cash balance plan worker based solely on the amount contributed to the (worker's individual) account and any (investment) income, gains net of any expenses and losses. Under the definition of accrued benefit under Code §411(a)(7)(A)(ii) in the case of a plan that is not a defined benefit plan, [the term accrued benefit] means the balance [in] the employee's [individual] account. On the other hand, for defined-benefit plans, Section §411(a)(7)(A)(i) states that "accrued benefit" means "the employee’s [] annual benefit" as it is "determined under the plan … expressed in the form of an … [annuity] … commencing at normal retirement age." Finally, the

pos: Retirement plans in the United States In general, they are treated as defined benefit plans for tax, accounting, and regulatory purposes. As with defined benefit plans, investment risk is largely borne by the plan sponsor. As with defined contribution designs, plan benefits are expressed in the terms of a notional "account balance", and are usually paid as cash balances upon termination of employment. These features make them more portable than traditional defined benefit plans and perhaps more attractive to a highly mobile workforce. A typical hybrid design is the Cash Balance Plan, where the employee's notional account balance grows by some defined rate of interest and

pos: Defined benefit pension plan many countries reaching into their budgets to help finance the pension expenditure, which now reaches double digits of GDP percentage. This stage can be observed in many European countries, especially those in the former Soviet block. While some countries like Poland passed their pension reform already, others like Czech Republic have yet to do anything about it In a "funded" plan, contributions from the employer, and sometimes also from plan members, are invested in a fund towards meeting the benefits. The future returns on the investments, and the future benefits to be paid, are not known in advance, so there

pos: Defined contribution plan purchase annuities with their savings upon retirement and bear the risk of outliving their assets. The "cost" of a defined contribution plan is readily calculated, but the benefit from a defined contribution plan depends upon the account balance at the time an employee is looking to use the assets. So, for this arrangement, the contribution is known but the benefit is unknown (until calculated). Despite the fact that the participant in a defined contribution plan typically has control over investment decisions, the plan sponsor retains a significant degree of fiduciary responsibility over investment of plan assets, including the selection of

pos: Retirement plans in the United States are classified as either defined benefit plans or defined contribution plans, depending on how benefits are determined. In a defined benefit (or pension) plan, benefits are calculated using a fixed formula that typically factors in final pay and service with an employer, and payments are made from a trust fund specifically dedicated to the plan. Separate accounts for each participant do not exist. By contrast, in a defined contribution plan, each participant has an account, and the benefit for the participant is dependent upon both the amount of money contributed into the account and the performance of the investments purchased

pos: Employee Retirement Income Security Act of 1974 purchase plans but not profit sharing or stock bonus plans. Before the Pension Protection Act of 2006 (PPA), a defined benefit plan maintained a "funding standard account", which was charged annually for the cost of benefits earned during the year and credited for employer contributions. Increases in the plan's liabilities due to benefit improvements, changes in actuarial assumptions, and any other reasons were amortized and charged to the account; decreases in the plan's liabilities were amortized and credited to the account. Every year, the employer was required to contribute the amount necessary to keep the funding standard account from falling

pos: Employee Retirement Income Security Act of 1974 based on years of service, salary and other factors. Defined contribution plans provide retirees with benefits based on the amount and investment performance of contributions made by the employee and/or employer over a number of years. ERISA does not require that an employer provide health insurance to its employees or retirees, but it regulates the operation of a health benefit plan if an employer chooses to establish one. There have been several significant amendments to ERISA concerning health benefit plans: Other relevant amendments to ERISA include the Newborns' and Mothers' Health Protection Act, the Mental Health Parity Act, and the

pos: Pension continue funding the plan. Traditional defined benefit plan designs (because of their typically flat accrual rate and the decreasing time for interest discounting as people get closer to retirement age) tend to exhibit a J-shaped accrual pattern of benefits, where the present value of benefits grows quite slowly early in an employee's career and accelerates significantly in mid-career: in other words it costs more to fund the pension for older employees than for younger ones (an "age bias"). Defined benefit pensions tend to be less portable than defined contribution plans, even if the plan allows a lump sum cash benefit

pos: 2012 San Diego primary election where required by law, and should the Mayor be required to post online all construction contracts over $25,000?" Ballot Title: Amends City Charter Regarding Retirement Benefits Ballot Language: "Should the Charter be amended to: direct City negotiators to seek limits on a City employee's compensation used to calculate pension benefits; eliminate defined benefit pensions for all new City Officials and employees, except police officers, substituting a defined contribution 401(k)-type plan; require substantially equal pension contributions from the City and employees; and eliminate, if permissible, a vote of employees or retirees to change their benefits?" 2012 San Diego primary election The

pos: Carl DeMaio June 2012 Proposition B, titled "Amendments to the San Diego City Charter Affecting Retirement Benefits," and he led the drive to put it on the ballot. Proposition B proposed (1) limiting of compensation used to calculate city employee pension benefits; (2) eliminating defined-benefit pensions for many new city employees, substituting a defined-contribution (401(k)-style) plan; (3) requiring substantially equal pension contributions from the City and employees; and (4) eliminating the right of employees/retirees to vote to change their benefits. Proposition B was approved by San Diego voters by a 2-to-1 margin on June 5, 2012. In 2010, DeMaio supported the addition

pos: Cooperative and Small Employer Charity Pension Flexibility Act Small Employer Charity Pension Flexibility Act would amend the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, with respect to cooperative and small employer charity pension plans (CSEC plans), to: (1) define such plans as employee benefit pension plans that are defined benefit plans maintained as of June 25, 2010, by multiple employers, all of whom are tax-exempt charitable organizations; (2) exempt CSEC plans from existing funding standards and allow such plans to establish minimum funding standards and special rules with respect to the valuation of plan assets, required contributions, and liquidity requirements; (3) allow

pos: Pension instance, it is a legal requirement to use the bulk of the fund to purchase an annuity.) The "cost" of a defined contribution plan is readily calculated, but the benefit from a defined contribution plan depends upon the account balance at the time an employee is looking to use the assets. So, for this arrangement, the "contribution is known" but the "benefit is unknown" (until calculated). Despite the fact that the participant in a defined contribution plan typically has control over investment decisions, the plan sponsor retains a significant degree of fiduciary responsibility over investment of plan assets, including the

pos: Retirement plans in the United States old worker is a feature of most traditional defined benefit plans, and any attempt to match it would reveal this backloading feature. To guard against tax abuse in the United States, the Internal Revenue Service (IRS) has promulgated rules that require that pension plans be permanent as opposed to a temporary arrangement used to capture tax benefits. Regulation 1.401-1(b)(2) states that "[t]hus, although the employer may reserve the right to change or terminate the plan, and to discontinue contributions thereunder, the abandonment of the plan for any reason other than business necessity within a few years after it has taken

pos: Defined benefit pension plan retirement, and other factors. A simple example is a dollars times service plan design that provides a certain amount per month based on the time an employee works for a company. For example, a plan offering $100 a month per year of service would provide $3,000 per month to a retiree with 30 years of service. While this type of plan is popular among unionized workers, final average pay (FAP) remains the most common type of defined-benefit plan offered in the United States. In FAP plans, the average salary over the final years of an employee's career determines the benefit

pos: Utah Retirement Systems to whichever plan a worker chooses. Employer contributions to the pension plan for new employees are capped at 10% of the employees salary. The 'Tier II' plans require 5 more years of employment for eligibility. The legislature also limited post-retirement re-employment. Utah Retirement Systems Utah Retirement Systems administers pension plans and retirement savings plans for public employees in the U.S. state of Utah. There are eight separate defined-benefit pension plans administered by URS, as well as various retirement savings plans. As of December 31, 2014, the URS was managing over $31 billion in its pension trust funds, for nearly 200,000

pos: Defined benefit pension plan based or established in common law. Employees are always entitled to the vested accrued benefit earned to date. 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. In the U.S., a defined benefit pension plan must allow its vested employees to receive their benefits no later than the 60th day after the end of the plan year in which they

pos: Defined contribution plan portion of his or her earnings (usually pretax) to an individual account, all or part of which is matched by the employer. In the United States, specifies a defined contribution plan as a "plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant's account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant's account." In a defined contribution plan, fixed contributions are paid into an individual account by employers and employees. The contributions are then

pos: Defined contribution health benefits Defined contribution health benefits A Defined Contribution Health Benefit is a consumer-driven health care arrangement in which employers choose a set dollar amount to contribute towards an employee’s healthcare. Under a Defined Contribution Health Plan the employee is responsible for researching and purchasing his or her own insurance policy. Defined contribution health plans are an alternative to traditional employer-sponsored group health insurance plans. A defined contribution health plan by itself is not a health insurance plan, but rather a health benefits strategy. lifying plan such as a Section 105 Medial Reimbursement Plan. Similar to a defined contribution plan used by

pos: Defined benefit pension plan fund commitments to employees and retirees. Many states and municipalities across the county now face chronic pension crises. Traditional defined benefit plan designs (because of their typically flat accrual rate and the decreasing time for interest discounting as people get closer to retirement age) tend to exhibit a J-shaped accrual pattern of benefits, where the present value of benefits grows quite slowly early in an employee's career and accelerates significantly in mid-career: in other words it costs more to fund the pension for older employees than for younger ones (an "age bias"). Defined benefit pensions tend to be less portable

pos: Retirement plans in the United States as there is no legal requirement to give "portability" to a Defined contribution plan, there is no mandated ban on portability for defined benefit plans. However, because the lump sum actuarial present value of a former worker's vested accrued benefit is uncertain, the mandate under in section 417(e) of the Internal Revenue Code specifies the interest and mortality figures that must be used. This uncertainty has limited the practical portability of defined benefit plans. It is commonly said that the employee bears investment risk for defined contribution plans, while the employer bears that risk in defined benefit plans. This is

pos: Pension in the U.S. So, for this arrangement, the benefit is relatively secure but the contribution is uncertain even when estimated by a professional. This has serious cost considerations and risks for the employer offering a pension plan. One of the growing concerns with defined benefit plans is that the level of future obligations will outpace the value of assets held by the plan. This "underfunding" dilemma can be faced by any type of defined benefit plan, private or public, but it is most acute in governmental and other public plans where political pressures and less rigorous accounting standards can result

pos: Cash balance plan that worker's projected final salary at retirement, but only the worker's salary on the date of valuation. Some cash balance plans communicate to workers that these "actuarial present values" are "hypothetical accounts" because upon termination of service, the employer will give the former worker the option to take "all his money" from the pension plan out. In reality, if both the worker and employer agree, even in a normal defined-benefit plan a former worker may take away "all his money" from the pension plan. There are no legal differences in this "portability" aspect between a traditional defined-benefit plan and a

pos: IAS 19 length of service. In many cases, defined benefit pension plans are funded and hold assets in order to meet those promised benefits. A defined benefit pension plan is an example of a post-employment benefit plan. Accounting for the costs and liabilities relating to such plans raises several issues. These include the following (note that paragraph references refer to IAS19 before it was revised in June 2011): IAS 19 IAS 19 or International Accounting Standard Nineteen rule concerning employee benefits under the IFRS rules set by the International Accounting Standards Board. In this case, "employee benefits" includes wages and salaries as

pos: Defined benefit pension plan executives, and 90% offer deferred compensation programs. Defined benefit plans may be either "funded" or "unfunded". In an "unfunded" defined benefit pension, no assets are set aside and the benefits are paid for by the employer or other pension sponsor as and when they are paid. This method of financing is known as "Pay-as-you-go" (PAYGO or PAYG). In the US, ERISA explicitly forbids pay as you go for private sector, qualified, defined benefit plans. However this system is often used in public pension systems. For example, all OECD countries including the U.S. rely on some form of a PAYG system.

pos: Retirement Compensation Arrangements (Canada) Retirement Compensation Arrangements (Canada) Retirement Compensation Arrangements (RCAs) are defined under subsection 248(1) of the Canadian "Income Tax Act", which allows 100 per cent tax-deductible corporate dollars to be deposited into an RCA, on behalf of the private business owner and/or key employee. No tax is paid by the owner/employee until benefits are received at retirement. Contributions to an RCA should not exceed what is required to fund the "entitlement" under the Generally Accepted Guidelines for pensions, which are: ""a normal level of benefits would be the same benefit provided under a registered pension plan without regard to the Revenue

pos: Health and welfare trust can provide certain benefit programs to employees, including a private health services plan ("PHSP") as defined under the Canada Revenue Agency (CRA) guidelines. One or more employees may be covered under an HWT. A HWT is a specific trust that satisfies certain requirements as set out in CRA guidelines (specifically paragraph 6 of the Interpretation Bulletin IT-85R2 - Health and Welfare Trusts for Employees) These requirements are as follows: (a) The funds of the HWT cannot revert to the employer or be used for any purpose other than providing the health and welfare benefits for which the contributions are made;

neg: Target benefit plan Target benefit plan A target benefit plan is a type of pension plan that is similar to a defined contribution plan in that it involves fixed contributions, or a fixed range of contributions, which are set independently of a plan’s funded position. Benefits are based on affordability projections. Plan members share plan risk through adjustments to their benefits. A key element of the target benefit model is the existence of pre-determined guidelines linking benefits to funds available in the plan. Benefits and contributions are linked in a way that does not exist with traditional defined benefit or defined contribution plans.

neg: Target benefit plan consulting work under the legislation. Target benefit plan A target benefit plan is a type of pension plan that is similar to a defined contribution plan in that it involves fixed contributions, or a fixed range of contributions, which are set independently of a plan’s funded position. Benefits are based on affordability projections. Plan members share plan risk through adjustments to their benefits. A key element of the target benefit model is the existence of pre-determined guidelines linking benefits to funds available in the plan. Benefits and contributions are linked in a way that does not exist with traditional defined

neg: Retirement plans in the United States by an actuary in a process known as valuation. A defined benefit plan is required to maintain adequate funding if it is to remain qualified. In an unfunded plan, no funds are set aside for the specific purpose of paying benefits. The benefits to be paid are met immediately by contributions to the plan or by general assets. Most government-run retirement plans, including Social Security, are unfunded, with benefits being paid directly out of current taxes and Social Security contributions. Most nonqualified plans are also unfunded. Hybrid plan designs combine the features of defined benefit and defined contribution plan designs.

neg: CalPERS has reciprocity agreements with many of these California public retirement systems that allow retirees with service credit and contributions in two systems to receive payments from both systems. Some people prefer defined contribution plans to CalPERS' defined benefit plan. For example: Among other arguments, CalPERS claims that defined contribution plans cost more to manage than defined benefit plans and fail to provide adequate funds to retirees. CalPERS is responsible for a deferred compensation retirement plan (457 plan) and two other plans to supplement income after retirement or permanent separation from State employment. As of December 2014: CalPERS offers two types

neg: Defined benefit pension plan premiums from sponsors of participating plans, assets of the plans it has taken over, recoveries from bankrupt companies' estates, and investment earnings. The PBGC's liabilities are not explicitly backed by the U.S. government. One of the growing concerns with defined benefit plans is that the level of future obligations will outpace the value of assets held by the plan. This "underfunding" dilemma can be faced by any type of defined benefit plan, private or public, but it is most acute in governmental and other public plans where political pressures and less rigorous accounting standards can result in inadequate contributions to

neg: Pension called "interest credit", is made as well. These are not actual contributions and further discussion is beyond the scope of this entry suffice it to say that there is currently much controversy. In general, they are usually treated as defined benefit plans for tax, accounting and regulatory purposes. As with defined benefit plans, investment risk in hybrid designs is largely borne by the plan sponsor. As with defined contribution designs, plan benefits are expressed in the terms of a notional "account balance," and are usually paid as cash balances upon termination of employment. These features make them more portable than

neg: Cash balance plan the last two decades, far more than have been converted to cash balance plans. Likewise, for the many employees who leave their job before retirement (whether voluntarily or not), many would be better off under the cash balance conversion than under the original defined-benefit plan. In addition, about half of cash balance conversions have grandfathered in some or all of the existing participants in the defined-benefit plan. The ubiquitous 401(k) plan is an example of a defined contribution plan because the Internal Revenue Code §414(i) states [t]hat the term defined-contribution plan means any plan that provides retirement benefits to a

neg: Target benefit plan the estimated earnings used in the assumptions and the investment performance of that account through the years. For pension plan sponsors, target benefits plan provide more flexibility than traditional defined benefit or defined contribution plans. Defined benefit plans provide a high degree of benefit certainty for members, but for plan sponsors contribution rates are more uncertain and funding costs can be high. Defined benefit plans can also contribute to intergeneration inequality, as retired members continue to receive benefits, whether or not those benefits were adequately pre-funded. The reverse is true for defined contribution plans where the contribution certainty comes at

neg: Oregon Public Employees Retirement System mechanism to divert member contributions away from the "money match" pension program that was partially responsible for generous benefits above the system's income replacement target, the IAP is a qualified defined contribution plan akin to a 401(k), 403(b), or 457(b). Member contributions are invested alongside pension assets and realize market gains and losses. The pension system has been reformed by the Oregon Legislative Assembly several times. Most recently, pension reforms signed by Oregon Governor John Kitzhaber in 2013 were challenged at, then subsequently reversed by, the Oregon Supreme Court. As of the end of 2016, the Oregon PERS defined benefit

neg: Christian Labour Association of Canada plan was established in 1974 and is available for members across Canada. It is a registered defined contribution plan, which means that contributions are made every month and vested directly in the member. Employers do not have access to the pension fund. The fund is overseen by a Board of Trustees, invested by outside professionals, and audited by an accounting firm. The Group RSP is run through Great-West Life and is available to members only in Western Canada. CLAC offers numerous group benefit plans, which are run through the Health and Welfare Trust Fund. There are two Benefit Administration offices.

neg: Pension become increasingly popular in the US since the 1990s. Examples include Cash Balance and Pension Equity plans. A traditional defined benefit (DB) plan is a plan in which the benefit on retirement is determined by a set formula, rather than depending on investment returns. Government pensions such as Social Security in the United States are a type of defined benefit pension plan. Traditionally, defined benefit plans for employers have been administered by institutions which exist specifically for that purpose, by large businesses, or, for government workers, by the government itself. A traditional form of defined benefit plan is the "final

neg: Oregon Public Employees Retirement System program expects its promised benefits to exceed current assets by $19.9 billion USD. The State of Oregon 457(b) Deferred Compensation Plan, known as the Oregon Savings Growth Plan (or OSGP), is provided to state and other eligible public sector employees as a supplement to the defined benefit (pension) mandatory to all PERS participants. As of October 2017, total assets of the DC plan were approximately 2.1 billion USD, with about 29,000 participants. Contributions to the plan are made by payroll deduction by participating employers to accounts recordkept by Voya Financial. Assets may be invested in a number of core plan

neg: Defined benefit pension plan elements in the benefit structure, for instance in the rate of increase granted on accrued pensions, both before and after retirement. The age bias, reduced portability and open ended risk make defined benefit plans better suited to large employers with less mobile workforces, such as the public sector (which has open-ended support from taxpayers). The "cost" of a defined benefit plan is not easily calculated, and requires an actuary or actuarial software. However, even with the best of tools, the cost of a defined benefit plan will always be an estimate based on economic and financial assumptions. These assumptions include

neg: Social Security Wage Base bonuses and overtime). Because Social Security provides a progressive benefit formula and stops taxation at the SSWB, pension plans may "integrate" benefits or contributions according to a wage base, frequently at a fraction (e.g. 50%) of the SSWB. Plans can contribute a higher percentage to base salaries above an integration base. If that integration base is identical to the SSWB the contributions may be double above the base not to exceed 5.7% for excess plans. For offset plans the defined-contribution plan may base contributions on total base salary and then reduce or "offset" the contribution rate for salary below the

neg: Cash balance plan these plans do not violate the age discrimination statutes applicable to defined benefit-pension plans. The statutes forbid – in virtually the same words – any plan from reducing "the rate of benefit accrual" for any worker on account "of the attainment of any age". Although the Code defines the "accrued benefit" for any worker covered by defined-benefit plans as "expressed in the form of an annual benefit commencing at normal retirement age" and defines "normal retirement benefit" as the "greater of the early retirement benefit under the plan, or the benefit under the plan commencing at normal retirement age", the

neg: Target benefit plan Target benefit plans are similar to defined benefit plans in that the annual contribution is determined by a formula to calculate the amount needed each year to accumulate (at an assumed interest rate) a fund sufficient to pay a projected retirement benefit, the target benefit, to each participant upon reaching retirement. It is similar to a defined contribution plan in that the plan does not guarantee any benefit will be paid. The plan's only obligation is to pay whatever benefit can be provided by the amount in the contributor’s account. The actual earnings on the individual accounts may differ from

neg: Retirement plans in the United States remains on the job. As of 2008, the courts have generally rejected the notion that cash balance plans discriminate based on age, while the Pension Protection Act of 2006 offers relief for most hybrid plans on a prospective basis. Although a cash balance plan is technically a defined benefit plan designed to allow workers to evaluate the economic worth their pension benefit in the manner of a defined contribution plan ("i.e.", as an account balance), the "target benefit" plan is a defined contribution plan designed to express its projected impact in terms of lifetime income as a percent of final

neg: Individual Pension Plan Individual Pension Plan An Individual Pension Plan or IPP is a Canadian retirement savings vehicle. An IPP is a one-person maximum Defined Benefit Pension Plan (DB Plan) which allows the plan member to accrue retirement income on a tax-deferred basis. As such, an IPP must conform to the Canadian Income Tax Act (ITA) and regulations (ITR) as well as the requirements of the Canada Revenue Agency (CRA) with respect to defined benefit pension plans. It is possible for an IPP to be a combination plan offering both Defined Benefits and Defined Contribution pensions Some of these rules and regulations are:

neg: Individual Pension Plan Individual Pension Plan An Individual Pension Plan or IPP is a Canadian retirement savings vehicle. An IPP is a one-person maximum Defined Benefit Pension Plan (DB Plan) which allows the plan member to accrue retirement income on a tax-deferred basis. As such, an IPP must conform to the Canadian Income Tax Act (ITA) and regulations (ITR) as well as the requirements of the Canada Revenue Agency (CRA) with respect to defined benefit pension plans. It is possible for an IPP to be a combination plan offering both Defined Benefits and Defined Contribution pensions Some of these rules and regulations are:

neg: Pension and proposed National Employment Savings Trust (NEST), Germany's Riester plans, Australia's Superannuation system and New Zealand's KiwiSaver scheme. Individual pension savings plans also exist in Austria, Czech Republic, Denmark, Greece, Finland, Ireland, Netherlands, Slovenia and Spain Hybrid plan designs combine the features of defined benefit and defined contribution plan designs. A cash balance plan is a defined benefit plan made to appear as if it were a defined contribution plan. They have "notional balances" in hypothetical accounts where, typically, each year the plan administrator will contribute an amount equal to a certain percentage of each participant's salary; a second contribution,

neg: Defined benefit pension plan The plan document has to allow for the automatic lump sum payment. However, you must begin to receive your benefits no later than April 1 of the calendar year next following the last year of employment or calendar year you reach age 70½, whichever is later. Defined benefit plans distribute their benefits through life annuities. In a life annuity, employees receive equal periodic benefit payments (monthly, quarterly, etc.) for the rest of their lives. A defined benefit pension plan allows joint distributions so a surviving spouse can still receive 50 percent of your payment. In the United States, 88 percent

neg: Michigan Office of Retirement Services Lieutenant Governor, Secretary of State, Attorney General, Auditor General, and the Court Administrator. As of September 30, 2017, the Defined Benefit plan covered 100 active members, and 551 retirees and beneficiaries. Effective March 31, 1997, all new enrollees participate in the Defined Contribution plan. The net assets of the Defined Benefit plan, valued at $265.8 million as of September 30, 2017, are invested by the Michigan Department of Treasury, Bureau of Investments. In fiscal year 2017, the System paid Defined Benefit plan retirement pensions totaling $23.7 million. Michigan Office of Retirement Services The Michigan Office of Retirement Services (ORS) administers

neg: Bankruptcy in the United States it is incorrect to refer to a bank or insurer as being "bankrupt". The terms "insolvent", "in liquidation", or "in receivership" would be appropriate under some circumstances. The Pension Benefit Guaranty Corporation (PBGC), a U.S. government corporation that insures certain defined benefit pension plan obligations, may assert liens in bankruptcy under either of two separate statutory provisions. The first is found in the Internal Revenue Code, at , which provides that liens held by the PBGC have the status of a tax lien. Under this provision, the unpaid mandatory pension contributions must exceed one million dollars for the lien to

neg: Defined contribution plan more than 4 million workers at about 16,400 companies. The Central Provident Fund (CPF) is Singapore's national pension fund. It is a defined contribution plan, contributed by employers and employees. With over 3 million members, it ranks among the world’s largest defined contribution (DC) schemes. The CPF Board, a statutory authority established by legislation, runs this national pension fund. Central Government employees in India who joined after January 1, 2006 participate in National Pension Scheme which is defined contribution plan run by Pension Fund Regulatory Authority of India. Earlier employees were under Defined Benefit Plan. All Government and Private sector

neg: Defined benefit pension plan GDP. Brazil and Turkey in year 1995 can be seen as great examples of this stage. Lastly countries reach stage 3. In this stage number of contributors to pensioners is only about six to one. Most of the population is covered however the debt starts to grow threatening the sustainability of the system. There is pressure from younger population to reduce the pension benefits and in turn contributions, but this is met with protest from middle and old-aged population who have contributed for most of their lives and want to receive their pensions. Those obstacles postpone any reform attempts, with

neg: Defined benefit pension plan PAYG is based on constant balance between two sides: contributions and benefits. People of working age pay part of their salary to the system and from this benefits are paid to people already in retirement. As time passes the contributors age until eventually they retire and claim benefits for themselves becoming pensioners supported by current working age generation. The size of their benefits is often determined based on their contributions which were percentage amounts of their salary, though this is not a rule. For example, in Denmark the size of old age pension is uniform for all retirees. The PAYG

neg: Retirement plans in the United States The other significant advantage is that the assets in the plan are allowed to grow through investing without the taxpayer being taxed on the annual growth year by year. Once the money is withdrawn it is taxed fully as income for the year of the withdrawal. There are many restrictions on contributions, especially with 401(k) and defined benefit plans. The restrictions are designed to make sure that highly compensated employees do not gain too much tax advantage at the expense of lesser paid employees. Currently two types of plan, the Roth IRA and the Roth 401(k), offer tax advantages that

neg: Defined benefit pension plan US, (under the ERISA rules), any reduction factor less than or equal to the actuarial early retirement reduction factor is acceptable. Many DB plans include early retirement provisions to encourage employees to retire early, before the attainment of normal retirement age (usually age 65). Some of those provisions come in the form of additional "temporary" or "supplemental benefits", which are payable to a certain age, usually before attaining normal retirement age. In the US, there are many laws and regulations concerning pension plans. For a defined benefit plan, the laws/regulations that most commonly affect defined benefit (DB) pension plans include:

neg: 2018 UK higher education strike interest rates have fallen since 2014, relative to inflation, and asset prices have soared ... We are now having to pay more – to get less in return – than we expected in the past'. Moreover, USS emphasised that its room for manoeuvre was constrained by the Pensions Regulator. In theory, the deficit could have been resolved through higher contribution rates. However, UUK argued that defined benefit schemes were becoming prohibitively expensive. They said they had a legal duty to put in place a credible plan to reduce the deficit by the summer of 2018. Otherwise, pension contributions from employers

neg: G.I. Bill vocational rehabilitation plan. Participants deemed to have a "serious employment handicap" will generally be granted exemption from the 12-year eligibility period and may receive additional months of entitlement as necessary to complete approved plans. The Veterans Educational Assistance Program (VEAP) is available for those who first entered active duty between January 1, 1977, and June 30, 1985, and elected to make contributions from their military pay to participate in this education benefit program. Participants' contributions are matched on a $2 for $1 basis by the Government. This benefit may be used for degree and certificate programs, flight training, apprenticeship/on-the-job training

neg: Pension as Supplemental Security Income in the United States of America or the "older person's grant" in South Africa. Some pension plans will provide for members in the event they suffer a disability. This may take the form of early entry into a retirement plan for a disabled member below the normal retirement age. Retirement plans may be classified as "defined benefit" or "defined contribution" according to how the benefits are determined. A defined benefit plan guarantees a certain payout at retirement, according to a fixed formula which usually depends on the member's salary and the number of years' membership in

neg: Bahrain election 2006 women candidates bloc. The law makes clear that financial resources of political associations should come from membership fees and contributions and from revenues of their investments in the Kingdom as defined by their internal regulations. A political society is under no circumstances allowed to accept any contribution, advantage or benefit from any foreigner or any foreign entity or international organisation. Women candidates therefore relied on financial support from sources such as the women's rights body, the Supreme Council for Women, which has also provided training to candidates. On October 22, the Khaleej Times reported that women candidates were receiving anonymous threats and

neg: Registered Disability Savings Plan RDSP can make contributions to the plan up to a lifetime limit of $200,000 for the benefit of the person named the beneficiary. Contributions are not tax-deductible, and earnings and growth accrue on a tax-deferred basis. Anyone can contribute. The contributions grow tax-free until withdrawn – at which time a proportion of the plan (earnings and growth received) is taxable and will need to be declared as income in the hands of the beneficiary at that time. In most cases it should not affect eligibility for provincial disability benefits. There are no maximum annuations. Contributions can be up to the

neg: Cash balance plan construct the initial balances in each worker's "hypothetical" account for these new cash balance pension plans. Also, §411(a)(1)(7) of the Code defines "accrued benefit". Thus pension actuaries are very familiar with changes in accrual rate factors used in a traditional defined-benefit pension plan's formula. In "Kathi Cooper v. IBM Personal Pension Plan", District Court Judge Murphy in 2003 came to the opposite conclusion because the terms accrued benefit and rate of benefit accrual were not ambiguous. According to Murphy benefits accrued at a decreasing rate solely based on increases in age, the plan design of the cash balance plan violated

neg: Defined benefit pension plan defined benefit plans are funded, because governments there provide tax incentives to funded plans (in Australia they are mandatory). In the United States, private employers must pay an insurance-type premium to the Pension Benefit Guaranty Corporation (PBGC), a government agency whose role is to encourage the continuation and maintenance of voluntary private pension plans and provide timely and uninterrupted payment of pension benefits. When the PBGC steps in and takes over a pension plan, it provides payment of pension benefits up to certain maximum amounts, which are indexed for inflation. The PBGC receives its funding from several sources, including insurance

neg: Secondary liability the defendant was unaware of the infringement, reasoning that the store proprietor had the power to cease the conduct of the concessionaire, and because the proprietor obtained direct financial benefit from the infringement. Contributory liability or contributory infringement has been widely defined as a form of liability on the part of someone who is not directly infringing but nevertheless is making contributions to the infringing acts of others. Material contributions to the act (or enabling thereof), as well as knowledge of the act itself, are key elements of contributory liability. Additionally, in the course of performing such material contributions, the

neg: Pensions crisis to existing DC plans. Employees in unions are more likely to be covered by a defined benefit plan, with 67% of union workers covered by such a plan during 2011 versus 13% of non-union workers. Economist Paul Krugman wrote in November 2013: "Today, however, workers who have any retirement plan at all generally have defined-contribution plans—basically, 401(k)'s—in which employers put money into a tax-sheltered account that's supposed to end up big enough to retire on. The trouble is that at this point it's clear that the shift to 401(k)'s was a gigantic failure. Employers took advantage of the switch to

neg: Mexico Pension Plan el Retiro (SIEFOREs). SIEFOREs are separate legal entities with their own Board of Directors, and segregated assets from AFOREs. In 1943 the Mexican government ratified legislation designed to provide its workers with social insurance administered by the Mexican Social Security Institute(IMSS) which included pensions, sickness insurance, and worker's compensation. From the 1950s through the 70s, the mobilization of laborers, with their political establishment affiliations, worked to improve the social insurance program along with expanding its level of coverage. Prior to the reform law, contributions to the pension system were managed and disbursed by the IMSS through a pay-as-you-go, defined benefit