| Retirement plans are employee benefit plans that | | | | amount upon your retirement. Plans like this may |
| are set up or maintained by an employer or a | | | | state the benefit as a dollar amount, or may |
| union that will provide income after the individual | | | | calculate it through various formulas. |
| worker retires. There are different types of | | | | A defined contribution plan doesn't tell you that |
| plans, including the 401(k) plan, and the defined | | | | you'll get a specific amount when you retire. |
| benefit plan. | | | | Instead, you or your employer put money |
| Most people who work in the private sector are | | | | toward your account and then these monies are |
| covered by ERISA, which is the Employee | | | | invested. Most of the time, you are responsible |
| Retirement Income Security Act. ERISA provides | | | | for choosing how the monies are invested. In |
| some protections for those who participate in | | | | some plans, your employer will match your |
| retirement plans. In addition, the individuals who | | | | contributions. |
| manage the plans have to meet conduct | | | | Employers are offering you a benefit when they |
| standards under the responsibilities that are | | | | open retirement plans for their employees. Federal |
| specified under the law. | | | | law does not require any employers to offer a |
| The retirement plan set up by your employer is | | | | plan, and the law also does not prohibit them |
| an essential part of your financial security in the | | | | from doing away with a plan they already have. |
| future. It's important that employees understand | | | | Of course, if you have monies invested in a plan |
| how their plans work, and what benefits they will | | | | that your company terminates, the funds you put |
| receive. Just as you keep track of bank accounts, | | | | it will be available for withdrawal, or for rollover to |
| you should keep track of your retirement | | | | a different 401-k from another company. |
| benefits. | | | | The PBGC - Pension Benefit Guaranty Corporation |
| The people who are responsible for the oversight | | | | - guarantees that certain retirement benefits will |
| and management of retirement plans have to | | | | be paid to employees or retirees in most plans, if |
| follow certain rules that cover the operation of | | | | the plan is terminated and not enough money s |
| the plans, handling the money in the plan, and | | | | left to pay all of its promised benefits. |
| watching over the firms that are hired to manage | | | | Check with your Human Resources or Benefits |
| the money. In addition, you should also understand | | | | Department at your company, to find out what |
| and monitor your benefits. | | | | type of retirement plan your company offers, |
| There are two major types of retirement plans, | | | | and which one you signed up for when you hired |
| and they are described as defined contribution and | | | | on. Then keep an eye on the accounts so you |
| defined benefit. | | | | can make sure that the money will be there for |
| A defined benefit plan is funded by your | | | | your retirement. |
| employer, and it promises you a monthly dollar | | | | |