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Are the funds that are contributed into a pension fund by employer and employee taxable or nontaxable?
Depends...on the plan...if it is "qualified" under the IRS rules or not AND if the contribution is within certain limits (as a percentage of income, etc.).
Also, it is almost always TAXABLE...but generally not NOW. Which is to say it may not be taxable the year it was contributed, but it (and the earnings on it) generally are when they are withdrawn or received.
As a general rule - most employers plans (like a 401k - which is named after the section of the code that establishes the guidelines for it) are qualified...and contributions to them by either party are not currently considered income taxable (although they may be subject to social security tax)...but upon retirement and taking the $ out, that will be.
To complicate it more, not all States follow the federal rules for what they consider income or unemployment, etc. taxable. (When and how much the employer gets to deduct as a payroll expense can be a much more complex calculation...but the employer paid contribution (he gets nothing out), is a payroll expense at some time).
What else can I help you with?
What is pension contributes?
Pension contributions are regular payments made by an employee and/or employer into a pension fund to provide income after retirement. These contributions are invested over time to build a retirement nest egg for the employee. The amount contributed and the investment performance will determine the eventual pension benefits received.
Do i have an employee annual pension statement?
That depends upon who your employer is.
Identify several factors that influence the future pension obligation of an employer under a defined benefit pension plan?
In adefined benefit plan the company pays the employee a fixed annual pension based on a formula. Factors that can influence it are: employee life expectancy, employee turnover, expected employee compensation levels, and investment income on pension contributions.
What is a vesting deed?
When referring to employment benefits, vesting is the amount of time to ownership to the employer's contribution to his or her accrued benefits. In the case of a pension, an employer makes contributions to an employee's retirement plans over the course of his or her employment. Generally, the employee must complete a certain amount of time before he or she has rights to the employer contributions in the pension plan. Plan benefits are said to "vest" at the end of that time period. Example: An employee receives $1,000 a year in employer contributions to his/her pension plan, with 50% vesting after 2 years of employment and 100% vesting after 3 years of employment. [To keep it simple, assume 0% returns in the pension plan.] If the employee quits at the beginning of his/her third year of employment, he or she is entitled to $1,000 * 2 years of employer contributions * 50% = $1,000 in the pension plan. If the employee quits at beginning of his/her fourth year of employment, at retirement, he or she is entitled to $1,000 * 3 years of employer contributions * 100% = $3,000 in the pension plan.
What does the term SEP- IRA mean?
The term SEP IRA stands for Simplified Employee Pension Individual Retirement Account. It is a retirement plan that is established by the employer or employee.
Can you collect pension and welfare?
The answer to this question depends on the specific rules and terms applied by the organizations involved in administering the pension and welfare payments. There's no general answer to this question -- please consult the aforementioned organizations for help.
What is the difference between a pension and an IRA?
A pension is a retirement plan provided by an employer, where the employer contributes funds for the employee's retirement. An IRA (Individual Retirement Account) is a retirement savings account that an individual can set up independently to save for retirement, with contributions made by the individual.
what piece of legislation protects participants in employer-sponsored pension plans from having their funds used inappropriately?
Employee Retirement Income Security Act
What law covers Employee contribution on pension plan?
what law covers the employee contribution on pension plan
How are expenses of termination of a Defined Benefit Pension Plan shared among the employer and employees?
db plans are pooled asset type plans (both employer and employee $) and expenses are normally deducted/paid from the assets.
What does being a vested employee means?
Being a vested employee means that your rights to pension benefits are paid up and therefore not contingent on the employee's continuing in the service of the employer. Erisa (Employee Retirement Income Security Act) stipulates that employees be at least 25% vested in benefits derived from employer contributions after 5 years. By the time the employee has worked for 15 years their vesting must have risen to 100%.
What money does a company save by making its employee self employed?
In the UK the saving to the company is the saving on employer's national insurance which is currently 12.8% with a 3.7% rebate for contracted out salary related pensions. In addition if the employer provides pension contributions then this will be a saving on an amployee transfering to self employed. This can vary between <1% to >20% depending on how generous the employer is and what type of pension scheme the employer offers
