You are on page 1of 2

AMRITPAL SINGH GILL

Advantages and Disadvantages of Pension Plan

Advantages-

No Investment Risk
There is no risk your pension is protect even if your employer goes bankrupt or loss the money
but he will still give you the pension and there will be no drop in your retirement benefits or
pension. Because, your pension will be takeover by a government agency or pension benefit
Guaranty Corporation.
Payments for Life
A person will get monthly payments after a retirement it means you can also fulfill your basic
needs after retirement even a person may died but his or her spouse will continue to get his
pension which could be significant point to be considered.
Employer contributions
It means employer have a great contributions rather than employee like we dont need to care
about the security of pension he will take care of our pension and an employee live onhis entire
paycheck. In future, it is very useful for an employee.
Tax deductible
The contribution to pension will help to find out the deduction of tax. It helps employee to show
less income after every year which directly reduce the tax of a person.

Disadvantages-

No Investment Control
Employee doesnt have any control on his or her retirement. He cannot take any benefit of
growing stock market because extra money will goes to his employer. Also, he cannot move his
investments into his account before retirement.
No Early Access
You cannot use your pension investment at early time. Sometime, a person can face financial
emergency but he cannot use his investment before his retirement which is prominent
disadvantage of pension plan.
No benefit from Interest
If the interest rate increases a pension will not able to get boon of increases in interest related
to pension investments.

http://budgeting.thenest.com/advantages-disadvantages-pensions-24634.html

http://www.finweb.com/retirement/the-benefits-and-drawbacks-of-pension-
plans.html#axzz4lWBeP0M4
http://www.rrq.gouv.qc.ca/en/programmes/rcr/Pages/avantages.aspx

You might also like