What Is a Money Purchase Pension Plan?

A money purchase pension plan (MPPP) is a defined contribution pension plan in which employee and employer contributions are made into a fund, which is then used to purchase an annuity for the employee at retirement. The key difference between an MPPP and a defined benefit pension plan is that with an MPPP, the amount … Read more

What Is a Defined-Benefit Plan?

Examples and How Payments Work. A defined-benefit plan is a type of retirement plan in which an employer promises to pay retirees a certain amount of money each month, regardless of how much money the plan has in assets. The amount of the monthly payment is determined by a formula that takes into account the … Read more

Registered Pension Plan (RPP).

A Registered Pension Plan (RPP) is a pension plan that has been registered with the Canadian government. RPPs are a type of defined benefit pension plan, which means that the benefits that a retiree receives are predetermined, and are based on factors such as length of service and salary. RPPs are typically sponsored by employers, … Read more

What Is a Pension?

How It Works, Taxation, and Types of Plans. What is a pension? A pension is a retirement savings plan that provides benefits to employees after they retire. pensions are typically funded by employer contributions and investment earnings. There are several types of pension plans, including defined benefit plans and defined contribution plans. Benefits from a … Read more

Salary Reduction Simplified Employee Pension Plan (SARSEP).

A Salary Reduction Simplified Employee Pension Plan (SARSEP) is a retirement plan that allows small businesses to offer their employees a retirement savings plan without the administrative burden and cost of a traditional pension plan. SARSEP plans are established by small businesses (generally those with 25 or fewer employees) and allow employees to make salary … Read more

Unfunded Pension Plan.

An unfunded pension plan is a retirement plan in which benefits are paid directly from the pension fund’s assets, rather than from a separate trust fund. This type of plan is typically used by small businesses or by organizations that do not have the ability to fund a trust fund. What are the 3 types … Read more

Pension Risk Transfer.

Pension risk transfer (PRT) is the general term used to describe the shifting of pension liabilities from one entity to another. This can be done through a lump sum payment, an annuity purchase, or some other form of financial transaction. There are a number of reasons why an entity might seek to transfer pension liabilities. … Read more

What Is Funded Status?

The “funded status” of a pension plan is the difference between the market value of the plan’s assets and the present value of the plan’s liabilities. If the market value of the plan’s assets is greater than the present value of the plan’s liabilities, the plan is said to be “overfunded.” If the market value … Read more

Actuarial Valuation.

An actuarial valuation is a periodic assessment of the financial health of a pension plan, usually conducted by an independent actuary. The valuation estimates the present value of all future benefits that have been earned by plan participants to date, and projects the expected financial costs of the plan over its remaining life. The valuation … Read more

Central Provident Fund (CPF).

The Central Provident Fund (CPF) is a compulsory savings scheme that provides retirement, healthcare and housing protection for working Singaporeans and permanent residents. Employees contribute a percentage of their monthly wages to their CPF account, while employers match these contributions. The CPF savings can be used for a variety of purposes, including buying a home, … Read more