Pension

A pension is given to a person to help ease costs after retirement. Employers can give pensions to employees called occupational pensions. There are essentially two different kinds of pension plans: defined benefit and defined contribution. A defined benefit plan is one that is determined by a formula taking an account the pay of the employees, years of employment and age they retired at. A defined contribution account means that the contributions are invested in the stock market or other investments. A big problem with pensions now is the same one as with social security and Medicare. There are going to be more and more people retiring with less people employed to support the funds, in addition to the increased life expectancy of the elderly. To combat this problem there is the possibility of increasing the retirement age but as always there are cons against it like the fairness to senior citizens who have earned time for their retirement.