Chapter

What Pension Plans Do

August Baker, Dennis E. Logue and Jack S. Rader

in Managing Pension and Retirement Plans

Published in print November 2004 | ISBN: 9780195165906
Published online July 2005 | e-ISBN: 9780199835508 | DOI: http://dx.doi.org/10.1093/019516590X.003.0002
 What Pension Plans Do

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This chapter discusses the five basic justifications for pension plans: (i) they have significant tax advantages, (ii) they help people save for retirement, (iii) they help employers recruit the type of workers they want, (iv) they can be used as severance pay, to help restructure the workforce, and (v) they can increase productivity. Pension plans offer more qualitative than quantitative advantages for employers and employees. The features that employers want to emphasize should be manifested in the type and design of pension plans.

Keywords: pension plans; employers; employees; retirement; recruitment; severance pay; employee productivity

Chapter.  2728 words. 

Subjects: Financial Markets

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