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In the way that (a) its establishment and monthly installments are mandated by law, at the rates prescribed by the law (which isn't the case for "a savings acco
by maratc 1y ago
In the way that (a) its establishment and monthly installments are mandated by law, at the rates prescribed by the law (which isn't the case for "a savings account"); (b) both the installments and the revenues are tax-free by the law (which isn't the case for "a savings account"); and (c) the law that establishes the fund, mandates payment on both employees and employers, determines the rates, and frees the whole thing from taxes is called "the Pension Law" (which isn't the case for "a savings account").
However if all of the above also applies to savings accounts in the place you reside in, you can call it "a savings account" all right.
- Retric 1y agoa) Historically pensions weren’t mandated by law, that’s irrelevant to the definition. b) We have tax breaks for retirement savings accounts c) Laws names are just a PR exercise, I’m sure you can think of several that don’t do what they imply.
- maratc 1y agoI think this is very similar to 401(k) or IRA, or "self-invested personal pension", except that the law sets the percentage amounts for both employee and employer contributions.
- Retric 1y agoWe don’t call a 401(k) or an IRA a pension. “A 401(k) is classified as a defined contribution plan while a pension is a defined benefit plan.“ https://www.investopedia.com/ask/answers/100314/whats-difference-between-401k-and-pension-plan.asp https://www.investopedia.com/ask/answers/100314/whats-differ... But there’s little point in arguing over definitions when it’s clear what’s actually going on.