Everyone needs a pension plan. If you’re planning for retirement with comfort then your employer is required to make contributions into a pool of funds that is specifically set aside for their employees future benefit. The collected funds is invested on the employee’s behalf, and any profit or earnings on the investment generates extra income for the employee when they retire.
What is a Pension Plan
In addition to your employer’s legally required contributions, some pension plans offer an extra voluntary investment component. Some pension plans may allow an employee to contribute part of his or her current income from wages into an investment plan to help fund their retirement. Some employers can also match a portion of the worker’s annual contributions, up to a specific percentage or monetary amount.