Pension Plan

Glossary

Pension Plan

An retirement plan sponsored by employers and unions, formally known as a defined benefit plan, that promises employees a specific monthly income in retirement based on such factors as years of service and salary. The plan sponsor is responsible for funding the plan, managing the assets and providing the benefit to retired and disabled workers as promised. Pension plans are now uncommon in the private sector, having been replaced by defined contribution plans such as 401(k) plans. See Pension

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