4 Types of Retirement Plans and

Employer-Sponsored Plans
In the rest of this article, we will explore employer-
sponsored plans in detail.
Qualified Plans
There are several types of qualified plans:
Defined benefit plans are company retirement plans,
such as pension plans, in which a retired employee
receives a specific amount based on salary history
and years of service, and in which the employer
bears the investment risk. 
Pensions are a type of retirement plan that
guarantees a specific amount to be paid out to
the employee during retirement. The amount is
calculated based on an employee's salary,
years of service and a fixed percentage rate.
The Pension Benefit Guarantee Corporation
(PBGC), a federal agency, covers employer-
sponsored pension plans. The insurance
covers a monthly maximum amount of about
$3,000 for a worker retiring at age 65.
Eligibility depends on a company's policy;
some companies require service for a certain
period of time before an employee can
become eligible for a pension plan. If an
employee leaves the job, the pension plan
stays with the previous employer.
Annuities are defined benefit plans that have
fixed monthly payments at the age of
retirement. Note that annuities cannot be
transferred into an IRA account, so the amount
is taxed as regular income the year it is
received. There are different options for
annuities:
Joint and 50%: The annuity is paid for life
 and after death, with the spouse receiving
half of the amount for the rest of his or
her life.
Joint and 66 2/3%: The annuity is paid for life
and after death, with the spouse receiving
two thirds of that amount for the rest of
his or her life.
Joint and 100%: The annuity is paid for life
and after death, with the spouse receiving
the full amount for the rest of his or her
life.
10-year certain & life: The annuity is paid for
life; if the participant dies in the first 10
years of retirement, the beneficiary
collects the same amount until reaching
the 10th year of retirement at which point
all payments stop. If the participant dies
10 years or more after retirement, the
payments stop at the time of the death.
Life Only: The annuity is paid for life, and
after death all payments stop.

Lump sum: The participant can take the total cash value
of the retirement plan.