Pension Plan?
By jeseravi
@jeseravi (337)
February 22, 2009 4:48pm CST
I've never really understood how it works. For the sake of argument let's say I make $100,000 a year. My company provides a pension plan for all employees. The plan is a defined contribution plan. Contributions start after the employee has worked continuously with company for one year. Contributions equal 8% of the gross salary and are deposited monthly. The vesting period on these contributions is; 50% at 3 years, 75% at 4 years, and 100% at 5 years. In addition, employees may elect to make voluntary contributions into a tax deferred annuity account.
If I contribute $8,000, do they match that? Is that the most I can contribute ever? Or do they give me $8,000 each year? What is the vesting period?
Thanks for your help!
1 response
@dlr297 (5409)
• United States
22 Feb 09
Pension plans are not easy to understand and i will not say that i understand it fully but this is the way that i believe that mine works, and it sounds alot like yours, The company will put 8% of what you make into company stocks, after 3 years you have control of 50% of that money and you can move it to your annuity, or keep it in the stocks.After 5 years you have complete control over the money and you can do what you want with it. I believe that your vested percentage is the money that you can control. and i believe that you can put in as much as you wish each pay check, but the company will only go up to the 8%. I hope that i helped a little, and did not confuse you more.
