Corporate Pension Schemes

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A corporate pension plan is a formal arrangement between the company and its employees that provides funding for the employees’ retirement. It is a retirement plan that requires the employer to make contributions into a pool of funds set aside for the employee’s future benefit. The pool of funds is invested on the employee’s behalf and the earnings on the investments, generate income to the employee upon his/her retirement.

Two of the most common corporate pension plans are the defined-benefit and the defined-contribution plans.