Key Takeaway: When a company files for Chapter 11 bankruptcy, it can impact the pension plan of its employees. This is because the company is allowed to reduce or terminate its contributions to the plan, leaving employees with potentially reduced benefits. The Pension Benefit Guaranty Corporation (PBGC) is a government agency that protects pensions in…

Key Takeaway: Understand the types of pensions: There are three types of pensions – state pension, workplace pension, and personal pension. Each type is taxed differently, so it’s important to understand your specific plan. Taxation of pensions depends on multiple factors: The amount of tax you pay on your pension depends on various factors, including…

Key Takeaway: Understanding tax relief on pension contributions in Ireland: Tax relief on pension contributions is a way of reducing your tax bill by putting money into a pension scheme. In Ireland, there are different tax relief rates depending on your income, age, and other factors. Eligibility for tax relief on pension contributions: Standard Fund…

Key Takeaway: A defined benefit pension plan is a retirement plan that guarantees a specific amount of income for life, based on an employee’s salary and years of service. This type of plan is primarily funded by employers, but employees may also contribute. One of the main advantages of a defined benefit pension plan is…

Key Takeaway: Net relevant earnings (NRE) refer to the income used to calculate pension contributions. It is important to understand what income is included and excluded from NRE, as it can affect pension planning and contributions. To calculate NRE, individuals should include income from employment, self-employment, and certain benefits in kind. Income excluded from NRE…

Key Takeaway: To qualify for VA pension, you must be a wartime veteran or the surviving spouse of a wartime veteran, and meet the income and net worth limitations set by the VA. The minimum length of service required for VA pension varies based on the type of service: active duty service requires at least…

Key Takeaway: Government Pension Offset (GPO) reduces Social Security benefits for those who receive a pension from a government job that did not contribute to Social Security. It is important to avoid GPO to secure your financial future in retirement. By working in a non-covered position or contributing to Social Security for at least 10…

Key Takeaway: Properly designating a beneficiary is important: To ensure that your pension benefits are passed on to the intended recipient(s), it is important to properly designate a beneficiary on your pension plan. Keep your beneficiary designation updated as needed, especially in case of life changes such as divorce or death of a beneficiary. Spousal…

Key Takeaway: State Pension is available to non-workers, but eligibility is based on minimum qualifying years of National Insurance contributions or credits. Minimum qualifying years for State Pension is currently 10 years, but applying for National Insurance credits can help those who have not worked or have gaps in their contributions. The amount of State…

Key Takeaway: Step 1: Determine your total pension income – Add up all sources of pension income, including government pensions, employment pensions, and annuity payments. Step 2: Calculate your pension income tax-free amount – This is the amount of pension income that is not subject to income tax and can vary based on age and…

Key Takeaway: Contact the HR department of your previous employer to request information about your pension plan. They may be able to provide you with details about your pension benefits, such as the plan name, contact information for the plan administrator, and your account balance. Check your emails and personal records for any information about…

Key Takeaway: Service Cost: This component of pension expense is the present value of the benefits earned by employees in the current year. This is based on the employees’ salaries and the rate at which they are expected to earn benefits in the future. Interest Cost: This component of pension expense is the increase in…