I don't understand why an employer from a business or company want to voluntarily fund a pension plan for its employees. From a financial standpoint, it would cost the company quite a bit without returning anything substantial. Anyone care to shed some light on this?
2006-10-07 20:34:06 · 5 answers · asked by david l 1 in Business & Finance ➔ Corporations
Defined benefit pension plans are no longer in vogue. Once the employer promises a certain level of pension benefits, the employer retains the risk if the pension plan is not sufficiently funded, for example if investment returns are worse than expected.
Nowadays it is more common for an employer to offer a defined contribution plan: the employer promises to make a certain contribution, but it is no longer the employer's risk if the plan is not sufficiently funded for a decent pension.
2006-10-08 03:47:07 · answer #1 · answered by fcas80 7 · 0⤊ 0⤋
The employer is looking after the welfare of the employee in question. Of course the aim is also to keep good employees as well.
2006-10-07 22:30:19 · answer #2 · answered by JP E 4 · 0⤊ 0⤋
NOPE, do no longer funds it. Roll it into 401k. it extremely is on your destiny! Taking it out, with you under age fifty 5, you pay 10% penalty and tax at your universal value, which skill you're dropping 20-50% of your funds. you will obtain a 1099R in case you withdraw the money. The 20% taken out is in simple terms withholding, that's no longer fee of taxes, in simple terms comparable to with paycheck.
2016-12-13 04:12:09 · answer #3 · answered by kull 4 · 0⤊ 0⤋
To compete with good companies who want to attract talented employees.
2006-10-07 20:39:56 · answer #4 · answered by vinny_the_hack 5 · 0⤊ 0⤋
They want good employees to stay, the bad ones they can fire.
2006-10-07 20:41:12 · answer #5 · answered by The professor 4 · 0⤊ 0⤋