It is important to understand how your retirement benefits work, as this is your key to future financial security. The best way to learn about it is to talk to your employer about the retirement benefits package they offer.
Usually they have two types of plans that can be offered: the defined benefit plan, in which your employer is the one funding it and will guarantee you a specific monthly benefit once you started to retire. The monthly benefit that you will receive may be based on different factors such as the salary you're earning during your tenure, your age, and the number of years you worked for the company.
On the other hand, a defined contribution plan is funded by you and/or the employer. During your tenure of work, a certain percentage of your salary is deducted as part of your monthly contribution, and your employer may add to your account as well. Once you retire, you will receive the balance of your account that reflects your past contributions, plus any investment gains or losses. This is the more popular type of benefits plan for most companies, usually called 401(k).
When you already know about your employer's retirement benefits options, you have to find out how your can participate in the plan of your choice and how to begin earning them. Employers usually will give you a summary plan description document for you to learn the rules and requirements. Your claims administrator should give you that document periodically and will notify you about your summary of monthly contributions and obligations.
Your retirement benefits are governed by the Employee Retirement Income Security Act, or ERISA - a federal statute that sets provisions for most employer and union-sponsored retirement plans. If you believe that your retirement benefits failed to follow ERISA requirements, you can contact an employment lawyer to seek legal advice. Our team of lawyers from Mesriani Law Group can assist you regarding ERISA provisions and claims procedures. Call us today for more information.
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