Pensions and Retairement Future Trends and Options Essay

Pensions and Retairement Future Trends and Options - Essay ExamplePension is generally calculated depending on the raw material Pay and the Dearness allowance of the employees salary. An employee transmits his premium till his liveliness time, after which the issue forth is given to their spouse.In some(prenominal) companies, pensions come with an additional insurance cover time which serve wells the pensi wizrs or the disabled beneficiaries. Pension ensures the employee with a ideal income that helps the family. The amount is based on his last designation. It is safe to the employee as it is tax free. Pension is a test of moral support and security which helps them to lead a peaceful life.A government employee should retire from the presidential term at the age fixed by the respective departments. The age of loneliness may differ from one company to another. Retirement is of various types like retirement on obsoleteness and Voluntary Retirement Scheme. Superannuation is a form of retirement where the employee gets retired at the age as fixed by the organization. Voluntary retirement scheme is a form in which the employee permits the organization after some 10 or 20 years, depending on the norms of the organization. (Mendel 2009).In this scheme the employee need notwork till his retirement age. If an employee opts for this, he will get the pension amount and the proportionate lump sum amount for the remaining years of service. The government has changed this unconscious process and the employee retiring forrader his retirement age will get only the gratuity and other attains in addition to the pension. In the normal retirement scheme, the person serves in the organization till the fixed age and then retires. He will then get the Provident fund amount. Retirement benefits include leave encashment, retirement gratuity and his component part to the provident fund. Senior citizens are also eligible for all these benefits that help them to lead a pr oblem free life after their retirement. There are other types of pension like extraordinary pension scheme which is given to disabled employees or in case an employee loses his life during his job tenure, the amount is given to his family. Retirement pensions are a guaranteed form of income for the people. delimit benefit and delimitate contribution are the two classifications of retirement plans. Defined benefit plan ensures a certain amount at the time of retirement which is fixed based on the persons salary and years of service. Defined contribution plan gives an amount on retirement which depends on the money that he has contributed and his investments are included. (Copeland 2003). In some countries, defined benefit and defined contribution plan are combined and offered to the people after retirement. Defined benefit plans comes as a package inclusive of early retirement options. This allows the employee to get retirement before their retirement age is attained. Most of the e mployees prefer the defined contribution plan instead of defined benefit. hither the money a person gets is purely based on his investments and contributions and the employer does not assure a limited amount. This is an advantage to the employers as they need not guarantee an amount. When compared to this defined benefit plan is more beneficial since the employee gets a certain amount based on the average salary and this does not depend on the individuals investment. Defined contribution gives the amount as one lump sum where as defined benefit