Retirement Programs

Retirement benefits attempt to provide income for employees on retirement. Provisions for early retirement currently are included in many pension plans. Phased-in and part-time retirements also are used by some companies.

Pension Plans are retirement benefits established and funded by employers and employees. Pension Plans can be either contributory or noncontributory. In a contributory plan, money for pension benefits is paid in by both the employee and the employer. In a noncontributory plan, the employer provides all of the funds.

Payment of benefits can follow one of two plans. In a defined-contribution plan, the employer makes an annual payment to an employee's pension account. The key to this plan is the contribution rate, employee retirement benefits depend on fixed contributions and employee earnings levels. Profit-sharing plans, employee stock ownership plans and thrift plans often are defined-contribution plans. Because these plans hinge on the investment returns on the previous contributions, which can vary according to profitability or other factors, employees' retirement benefits are less secure and predictable.

In a defined-benefit plan, an employee is promised a pension amount based on age and service. The employer's contributions are based on calculations that focus on the benefits to be received by employees after retirement and the methods used to determine such benefits. The amount of an employee's benefits is determined by the person's length of service with the company and the person's average earnings over a five-year or longer period.

To find out more on how Compensation Resources, Inc. can help your company with Retirement Programs, please contact us or call us directly to speak with our compensation consultants at 877-934-0505.