Pensions - 1651 Words

Pensions ACCT 302 Pensions help us live with an income as we get older and have retired. â€Å"A pension plan is a financial arrangement that allows individuals to continue receiving some type of regular income even after they are no longer active in the workforce.† (1) Most of the pension options out there are used when you retire however there are certain instances where you can collect a pension before retirement due to a disability. Pension plans are also interchangeable with retirement plans they are basically the same thing. Pensions are based on years of service and what has been put into them both by the employee and the employer over the years of service. There are also pensions offered by government so it is possible to†¦show more content†¦Usually with the simple IRA the contribution percent is lower though. The other difference is that â€Å"worker contributions are capped at $6,000 per year, with employers matching a small share. No wait for vesting.† (6) The y are popular among small businesses that have less than 100 employees. SEP plans allow the employee and the employer to make contributions in the employees name instead of the company’s name. They are usually used by self-employed people small businesses. â€Å"Created by Congress and monitored by the Internal Revenue Service, SEP’s are designed to give small business owners and employees the same ability to set aside money for retirement as traditional large corporate pension funds†. (7) SARSEP plans, also known as Salary Reduction Simplified Employee Pension Plan, were used prior to 1996 when 401(k)’s came about. After 1996 no new plans were created, but the old ones were allowed to stay. (8) Profit-Sharing Plans split up the gains of a company between the company itself and the employees. They are set by a predetermined set of economic rules. Usually used by publicly traded companies. You can also have other retirement plans in place and can be any size business. These contributions will also be taxed when they are dispersed by the IRS during retirement. (9) Defined Benefit Plans is â€Å"An employer-sponsored retirement plan whereShow MoreRelatedPension Benefits And Benefits Of Pensions1742 Words   |  7 Pagespaper is that of pensions. Pensions are an important topic in the field of accounting due to all the specific accounting methods and procedures that go along with them as well as the fact that pensions are so widely used and can make up a large part of a company’s expenses. Within the topic of pensions to be covered in this paper fall the concepts of the types of pension plans, pension obligations and plan assets, pension expense, as well as various re porting issues. Pensions Pensions are a benefitRead MoreBenefits And Benefits Of Pension Pensions1401 Words   |  6 PagesPension, a regular payment made during a person’s retirement from an investment fund to which that person or their employer has contributed to during their working life. After retirement a retiree depends one their pension as a source of income. Hundreds of thousands of Americans who have spent their lives working hard to support themselves and or their families for years have gotten their pensions either cut or completely taken away. There are a variety of negative effects for pension recipientsRead MoreA Brief Note On Pension And Pension Liability847 Words   |  4 Pages Pension vs Pension Liability A pension is an amount of money that a business or government uses to make payments to its retirees. The company usually doesn t pay pension benefits directly, rather it buys an annuity which converts a fixed amount of money into a lifetime of annual payments for the retiree. However, investing in it can be tricky. The amount to which a guarantee is based on, changes over the years. When the stock market takes a decline, the investment can too which means lessRead MorePublic Pension And Pension Reform1486 Words   |  6 Pagesperiod, state and local policymakers and labor unions ignored the growing public pension obligations as they became an increasing fiscal burden. The pension problem was enormous and associated with irresponsible financial practices connected to defined benefit pension plans (Thompson, 1980, 118). Following this, the state of California and its local governments have a problem of underfunded and unfunded public pension liabilities that was estimated to be around $583 billion (Nava Christensen, 2015Read MorePension Costs1661 Words   |  7 Pagescosts of pension plans, Leah Hutcherson, CPA, encounters certain terms. 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Eddy Birrer in his article titled, â€Å"GASB Statement 68 on Pensions: A Solution to the Public Pension Crisis?† he stated, â€Å"the Chicago retirement system for teachers, firefighters, and others is underfunded by nearly $24 billion, with residents facing a potential 150-percent increase in property taxes.† (2014, pg. 1) However, a 150-percent property tax rate increase may not be the answer in order to resolve Kentucky’s pension deficit, as it will only increase taxes for property owners insteadRead MoreContributions Of The Pension System1278 Words   |  6 Pages A defined contribution (DC) scheme on the other hand is a pension plan whose value depends on an individual’s own contributions, those from his/her employer and the government; generally in the form of a tax relief. These contributions are reinvested in the stock market and up on retirement, the accumulated value of the fund is received and can be used to secure a pension income. A choice is usually made to either purchase an annuity (a product which offers a guaranteed income for life), used asRead MoreThe Benefits Of Retirement Pension1700 Words   |  7 Pagesabout reversing Old Age Security eligible age back to 65 and including this in Liberal’s first budget which is announced by Prime Minister recently, has been intensively debated (Harris, 2016). This also raises people’s concerns about retirement pension fund defined as investment plan or fund that provide employees with a certain amount of income during their retirement (Morley, 2012). Reversing retiring age is a controversial policy because it has two sides. Retiring earlier means that employeesRead MoreMacau Pension Fund1084 Words   |  5 Pagesindependent fund under the local government. In Macau, Pension fund is included in the SSF, and there is no separation between the management of pension fund and SSF. Instead, pension fund is considered as an expense from the aspect of financial management. All the working people, including non-permanent and permanent residents, are required to contribute to SSF in each month. If they have contributed enough amounts, they can get part of or all the pension fund payment after retirement. Since 1993, theRead MoreThe Contribution Of Pension Scheme Essay1253 Words   |  6 Pagesreceived on investment of the fund and the capital gains derived from secondary market operations taken together and calculated on year ending balances in members accounts are credited as interest to members’ accounts. The overarching objective of any pension scheme is to provide beneficiaries with an adequate income stream during the post-employment period. In order to avoid deficits emerging in future, a well-managed fund should aim to earn enough from investment returns in order to pay for the interest