A pension is a fixed sum of money paid regularly to a retiree. A pension plan is funded by the employee, employer or both. For plans that require employee contributions, money is invested and then used to purchase an annuity, which provides a set income.Know More
The number of companies offering a pension plan to new employees declined from 60 percent of Fortune 500 companies in 1998 to just 24 percent by the end of 2013. As of 2013, only 7 percent of Fortune 500 companies offered traditional pension plans.
Traditional pension plans typically use a formula to determine the amount of money the retiree receives. This formula is a percentage multiplied by the number of years of service and factoring in the employee's ending salary. The formula varies, but as of 2014, Exxon Mobile offers 1.6 percent times the pension service years times the average last pensionable pay less Social Security deductions. Lockheed Martin, United Parcel Service, Johnson and Johnson, 3M, Bank of America, Wachovia, Coca Cola, Accenture, and Liden Nestle Soled & Associates are companies that still offer a defined benefit, or pension plan, as of 2013. In Nestle's plan, if the employer contributes $200 per month for 30 years, the employee receives $6,000 per month for the rest of his life.Learn more about Financial Planning
Individuals who leave their employment or try to consolidate their retirement assets should consider rolling their pensions into an IRA, recommends U.S. News and World Report. This allows them to have greater control over the investment of their retirement funds.Full Answer >
Military retiree pay is calculated based on either the Final Pay, High 36 or Career Status Bonus plan, notes Military.com. Period of tenure in the military and years of active service dictate what plan applies to each specific retiree.Full Answer >
To write a basic income statement for a financial period, calculate expenses and costs of goods sold, and then subtract the sum from revenues. Showcase the obtained figure as the last entry in the statement. Write the entity's name, the title of the statement and the respective financial period on the top.Full Answer >
Comparing the advantages and disadvantages of lump sum and annuity pension options involves a consideration of the pension holder's overall financial situation, life expectancy and ability to manage investments, states U.S. News & World Report. Another factor is the account holder's desire to continue annual income for a spouse.Full Answer >