Simplified Employee Pension Plan (SEP) is a plan in which the employer makes contributions on a tax-favored basis to individual retirement accounts (IRAs) owned by the employees. If certain conditions are met, the employer is not subject to the reporting and disclosure requirements of most retirement plans. Under a SEP, an IRA is set up [...]
Posts Tagged ‘retirement plan’
What is Employee Stock Ownership Plan (ESOP)?
Employee Stock Ownership Plan (ESOP) is a type of defined contribution plan that is invested primarily in employer stock. Source: U.S. Department of Labor
Employee Retirement Income Security Act of 1974 (ERISA)
A Federal law that sets standards of protection for individuals in most voluntarily established, private-sector retirement plans. ERISA requires plans to provide participants with plan information, including important facts about plan features and funding; sets minimum standards for participation, vesting, benefit accrual, and funding; provides fiduciary responsibilities for those who manage and control plan assets; [...]
About Defined Contribution Plan
In a defined contribution plan, the employee and/or the employer contribute to the employee’s individual account under the plan. The employee often decides how their accounts are invested. The amount in the account at distribution includes the contributions and investment gains or losses, minus any investment and administrative fees. The contributions and earnings are not [...]
What is Defined Benefit Plan?
This type of plan, also known as the traditional pension plan, promises the participant a specified monthly benefit at retirement. Often, the benefit is based on factors such as your salary, your age, and the number of years you worked for the employer. Source: U.S. Department of Labor
What You Should Know About Your Retirement Plan
Your employer’s retirement savings plan is an essential part of your future financial security. It is important to understand how your plan works and what benefits you will receive. Just as you would keep track of money that you put in a bank or other financial institution, it is in your best interest to keep [...]