The Retirement Plan vs Pension Plan Conundrum: Understanding Your Options The distinction between retirement plans and pension plans is often blurred, leading to confusion among employees about their best options for securing a comfortable post work life.
At its core, a pension plan is an employer sponsored benefit that provides a guaranteed income stream in retirement, typically funded by both employers and employees through contributions or investments.
Retirement plans have their roots in the United States in the early 20th century, when companies first offered pension plans as a way to provide a stable income stream for employees.