There are several different types of pension plans that an employer may offer. Each plan offers a different contribution amount and has different rules attached to the plan. Different pension plans allow you to withdraw your money at different times, and can also be a little bit biased. Pension plans have not always been regulated which means that some employees have had more money put into their pension plan over the years than others based on a number of unmeasured reasons. Let’s dive into the different types of pension plans that may be offered by your employers and what they entail as well as the regulatory institutions that have been developed to ensure that pension plans meets some sort of regulated standards for all to prevent discriminatory lawsuits.
Defined Benefit Plan
This plan is when the employer will pay the employee a fixed amount of money on a monthly basis upon retirement. This was the most prevalent type of pension plan when they were first created.
Defined Contribution Plan
This plan consists of a monthly amount paid by your employer while you are employed there. You can contribute to this plan as well. This plan works very similarly to the way in which a 401K functions. When you decide to retire, you take the account with you and use that money for retirement at your own discretion.
This is a combination of contributions from your employer along with your social security plan. This allows employers to vary the amount of the contribution based on what each worker makes. Most employers will contribute more money to this plan for those who make less!
Due to the fact that it is essentially up to the business or plan administrator to determine what goes into which pension plan account, and when, a few different regulatory commissions have been established to ensure fairness among employee pension plans.
Employee Retirement Income Security Act (ERISA)
This plan is regulated by the U.S Department of Labor. It sets a minimum percentage of money that must be deposited into each employees pension plan to ensure that each employee is being treated fairly as far as pension plans go. This act allows for people who feel that they have been treated unfairly in respect to their pension plan to sue their employer. If you feel as though you have been mistreated in regards to your pension plan, contact one of our ERISA lawyers in Tuscaloosa today!
Pension Benefit Guaranty Corporation
This organization insures pension plans. This insurance is available to protect your pension plan. You pay a monthly premium to ensure that you will get your pension plan payments when it comes time to retire.
Not sure if you have been or are receiving a fair pension plan contribution from you employer? If you feel like you have been, or may be being wronged as far as your pension plan goes, contact The Martin Law Group! Our ERISA lawyers will fight for you!