Pension Schemes

Points about pension

After years of hard-work when one puts up their feet, what they expect is a quiet and comfortable life. For this, financial independence is very important. Apart from the severance benefit, that monthly assured sum – called pension, is more a relief than anything. But how many would know anything about it from beyond what they get?
What is a pension?

The pension is an assured monthly payment that one gets after retiring from their job. A pension fund is either created by the employer for each employee or by an individual by investing in a pension plan with some agency. Apart from the retirement pension, the government too has initiated pensions for the benefit of various people of the society.
Where did it begin?

The first instance of pension began in Germany when Duke Ernest the Pious of Gotha, started a widow’s fund and later a fund for teachers. This later on spread to other parts of Europe. Old age pension too started from there. They taxed the workers to fund the old people. Even the UK, USA and Ireland have their share in introducing different types of pensions.

Various forms of pensions

Besides, what the employer provides, there are also a whole lot of pensions that the government has introduced for the protection and advantage of people from various strata and sections of the society. Mentioned below are a few:

1) Employment, pension: This is created by the employer. The periodic amount that has to be put in an individual’s account is calculated on the basis of the years of service with the company plus the age of the person and the total cost to the company.
2) Widow pension: This is for widows who are above the age of 40 and are below the poverty line
3) Disability pension: This is for people who are unable to support themselves due to mental or physical disability. After a detailed medical examination by the doctor appointed by the government this pension is created for the individual
4) Family pension: This pension is transferred to the spouse of the pensioner, in the case of their death, or to their dependent children, if even the spouse is no more
5) Compulsory Retirement pension: In case a where a person is forced to retire from the job due to some penalty, even they shall receive pension that they are eligible for
6) Pension plan: This is created by the individual by investing in a pension fund with the government agencies or with insurance companies. The pension received is calculated on the basis of premium paid, for a number of years the policy is created

Pensions UK

All the pension schemes came into existence to give people economic freedom. So that after years of hard work, if they have been working, or due to some unforeseen reason they have been rendered disable (mentally, physically or emotionally); they can continue to lead their life with dignity and not get subjected to neglect from people around or society in general.