What is Pension?
{{unreferenced|date=August 2009}} A '''pension''' is a steady [[income]] given to someone. If pensions are part of a system of [[social security]], the recipient of the pension is usually [[retirement|retired]] or [[disabled]]. They either have worked a long time during their life, or they are physically unable to do so. A pension is usually paid until a certain date (or event) occurs. In the case of social security plans, pensions are usually linked to the life of the person who receives the pension. A '''defined Benefit''' pension defines the benefit to the worker based on [[salary]] basis, years worked, and a multiplier. An example might be 2@55 final 3, meaning that the annuity is the highest 3-year average salary times years worked times 2% (if age 55). A worker with 30 years service would receive 2*30 or 60% of their salary. Some systems allow a worker to receive more than 100% salary by various maneuvers to alter the final salary basis. A '''defined Contribution''' pension defines the contribution, without constraining or promising a certain benefit. For example, a company might contribute 10% of a worker's salary to a pension account of the worker's choice, with final benefit received linked to the performance of the investment chosen. == Crisis == Many pension systems are underfunded and likely unsustainable based on independent financial analysis. Pension reform is a popular topic since about [[2009]], with pension [[debt]] seen as a contributing factor in the [[Economic deficit|deficits]] at all levels of government. {{stub}} [[Category:Income]] [[Category:Social security]] [[Category:Old age]]