Pension Plan
"Pension plan" means a deferred compensation plan established and maintained by one or more employers to provide systematically for the payment of benefits to plan participants after their retirement, provided that the benefits are paid for life or are payable for life at the option of the employees. Additional benefits such as permanent and total disability and death payments, and survivorship payments to beneficiaries of deceased employees may be an integral part of a pension plan. [1]
Are 401(k) plans, Pension Plans
A 401(k) plan is a common name in the USA for the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code. Under the plan, retirement savings contributions are provided (and sometimes proportionately matched) by an employer, deducted from the employee's paycheck before taxation (therefore tax-deferred until withdrawn during retirement), and limited to a maximum pre-tax annual contribution of $17,500 (as of 2013).[2]
Alternative employer-provided defined-contribution pensions include 403(b) and 401(a), offering higher mandatory limits[3].
References and Notes
- ↑ CAS 412 - Pension Costs
- ↑ http://en.wikipedia.org/wiki/401(k)
- ↑ http://en.wikipedia.org/wiki/401(k)