Pension refers to regular monthly income which an individual receives after retirement from his or her service, however not all organizations pay pension to its employees but government organizations and some private companies pay pension to its employees after they retire from their service. There are certain important points about the pension which one should look at, let’s see some of the points –
- It is payable to the individual only after the retirement from the service and not before retirement.
- Pension is a social security for old age people and therefore every government all over the world undertakes this process and after the death of the employee in some countries family pension is also given to the spouse which is normally 50 percent of the amount which employees was getting.
- An employee should complete a predetermined term before being eligible for pension which may be 20 to 30 years of service in the company. So if the employee gives resignation after completing 10 years of service then he or she would not be eligible for the pension.
- The amount of pension is dependent on the basis of salary which the person was drawing before he or she retired from the service and therefore it is not same for all the employees of the company.
- Amount of pension more or less remains fixed, however if inflation rises then little increase may happen although that increase is not equivalent to that of inflation rise and that is the reason why pension earners are also called fixed income group as there income remains fixed irrespective of inflation.
Apart from above points there are many other rules and regulations depending on the country in which you live because every country has different set of rules and regulation regarding retirement payments.