A defined benefits pension are a employee benefit that use to be extremely popular and today are somewhat a thing of the past. Technically, this sort of pension, is an income stream that one would earn by working at a company for several years. It is a fixed income stream that is not contingent per se on the stock or bond market. It is usually underwritten by an insurance company that guarantees the income stream. At retirement age the pension earner would have a window to select or choose what the terms are on the pension. This choice is almost always irrevocable (not able to be changed once made).
Typically a pensioner (person who has the pension) would have several options to choose from. There are several factors to keep in mind when making a selection:
There are also many risks that need thought through when one considers what to do with a pension:
Part of the services we offer to our clients and/or customers is a full service financial advisory package. We help look at financial matters and make educated decisions. If you or someone you know needs help reviewing their pension options please let us know. We are here to be a resource.