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institutional investments- the pension schemes - Essay Example
Author : mittiekling
Finance & Accounting
Pages 8 (2008 words)
Institutional investments- the pension schemes (Author’s name) (Institutional Affiliation) Abstract Pension schemes are put in place to provide a retirement arrangement to people when they will not be able to earn income after retirement. This requires the employer and the employee’s conscience to the contribution of money during the employment period in order to benefit during their retirement period…
18). These are retirement plans made by insurance companies, the government and other institutions put in place to assist their employers after retirement period. Pension is usually made by the employer’s body in order to enable their employees sustain themselves after retirement as they are not able to be paid their normal salaries after retirement. Through this they will be able to benefit and support themselves. In addition to this, they can be funded by labor unions as well as the government, among other organizations. Pension schemes can be divided into defined-benefit and defined-contribution pension scheme. Differences between Defined-benefit and Defined-contribution Pension Schemes A defined benefit pension scheme is dependent on the final salary of an employee depending on the member’s length of service and based on a fixed formula (Mathis & Jackson 2012, pg. 11). It can be either funded defined benefit pension scheme or unfunded defined pension scheme whereby the benefits are paid up by the sponsor or the employee. ...
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