The idea of working well past the age of retirement might be appealing to some workaholics, but most people in Tennessee already have a vision of the retirement they would one day like to enjoy. These retirement plans often hinge on savings, pensions and other retirement benefits. The Employee Retirement Income Security Act of 1974 — ERISA — helps protect those retirement assets in a number of different ways.
Defined benefit and defined contribution pensions are both forms of retirement plans that a person might be offered by their place of employment. In a defined benefit plan, a worker is promised a specific benefit amount, which is then paid monthly upon retirement. These plans generally offer either a specific dollar amount or a calculated benefit based on a person’s final salary and years of employment.
By contrast, a defined contribution plan does not offer a specific amount to be paid upon retirement. Instead, an employer and employee — or in some cases, just an employee — both contribute to a retirement account. Contributions are usually at set percentage rates that may change from year to year, and the value of those retirement savings can fluctuate depending on investments that the retirement accounts are based in.
Tennessee employers have legal responsibility in both the defined benefit and defined contribution plans. ERISA is supposed to protect employees from those who would otherwise shirk these responsibilities, but many companies and businesses still try to get around doing their part. For those who believe that their employers are behaving wrongly in regard to their retirement accounts, speaking with an experienced attorney is often well-advised.