pension

Employment & benefitsLegal glossary term

Legal Definition

A pension is a benefit provided by an employer to an employee, typically consisting of a defined benefit or defined contribution plan, which provides a regular income stream to the employee after retirement. It represents a legal obligation for the employer to provide a specified amount of benefits to the employee.

Plain-English Translation

Imagine a promise from your job that says you will get money when you stop working. This is like a special savings plan that helps you get money after you retire, which is a big deal!

Context in Contracts

It matters because it establishes the legal obligation of the employer to provide a specific financial benefit to the employee, which is crucial in employment law and contract disputes regarding employee entitlements.

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01

A defined benefit plan where the employer guarantees a specific monthly payment upon retirement.

02

A defined contribution plan where the employer's contributions determine the pension amount.

Document context

How pension shows up in legal documents

What is it?

A pension refers to a benefit provided by an employer to an employee, usually through a retirement plan, that provides a regular income stream for the employee upon retirement.

Why does it matter?

It matters because it establishes the legal obligation of the employer to provide a specific financial benefit to the employee, which is crucial in employment law and contract disputes regarding employee entitlements.

When does it matter?

It usually appears when discussing employee benefits, retirement planning, or contractual obligations related to long-term employment.

Where is it usually seen?

It is usually seen in legal documents pertaining to employment contracts, benefit plans, trust agreements, and regulatory filings concerning employee welfare.

Who is affected?

The employer (the entity providing the pension) and the employee (the beneficiary receiving the pension) are affected by it, as is the plan's structure and the employee's future financial security.

How does it work?

In practice, a pension works by establishing a legal framework where an employer commits to provide a specific retirement benefit, often involving contributions from both the employer and the employee, which dictates the terms of the retirement payout.

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Wikipedia

Pension

A pension (; from Latin pensiō 'payment') is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be either a "defined benefit...

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Disclaimer: We do not provide legal advice. We translate legal language into plain English and help you prepare for a conversation with a lawyer.