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That's not the case. Pensions are not always funded entirely by employer. In quite a few cases the salary of a worker is reduced by a certain amount that is add
by notyourday 6y ago
That's not the case. Pensions are not always funded entirely by employer. In quite a few cases the salary of a worker is reduced by a certain amount that is added to what is contributed towards a pension by an employer.
The difference between a pension and 401(k) type plan is that pension is a defined benefit plan and 401(k) type plan is a defined contribution plan.
- danso 6y agoYes, you're right that a pension often involves a reduced salary for the promise of a pension at retirement age. That's a huge part of the appeal of a public sector job that pays significantly less than its counter parts in the private sector. And that's why public sector employees get extremely angry and litigious when governments try to reduce their obligations, even as agencies face dire financial straits. Which 401(k) plans are you thinking of require paying out to a retired employee if that employee has contributed 0%?
- notyourday 6y agoSorry I'm not following the question.