MTHEL131 Lecture Notes - Lecture 10: Pension, Life Insurance, Old Age Security
13 Jun 2017
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Document Summary
2 broad types: employer/private sector pensions, government pensions. Pensions you own from working with an employer. 2 types: defined benefit pension plan, defined contribution pension plan. The benefit/monthly payment at retirement is defined by a formula: Years of service x income x pension factor. Years of service: number of years person worked at company. Income: size of pension is a factor of income. Calculated in 3 ways: career average, average of best 3 years, average of last 3 years. Will be stated clearly which approach to use. Pension factor: defined as the generosity of employer ex: 1%, 1. 5%, 2% Ex: bob is 60, worked at a company for 30 years and is looking to retire. k a year at the age of 30, and income grew steadily to k at the age of 55. 5 years, bob took another position and was paid k.
