PENSION PLAN

pension plan. 1. Under ERISA, any plan, fund, or program established or maintained by an employer or an employee organization that provides retirement income to employees or results in a deferral of income by employees extending to the termination of employment or beyond. 29 USCA § 1002(2)(A). [Cases: Pensions  28. C.J.S. Pensions and Retirement Plans and Benefits §§ 11–15.] 2. Under the Internal Revenue Code, an employer’s plan established and maintained primarily to provide systematically for the payment of definitely determinable benefits to employees over a period of years, usu. for life, after retirement. See EMPLOYEE RETIREMENT INCOME SECURITY ACT. Cf. EMPLOYEE BENEFIT PLAN.

contributory pension plan. A pension plan in which both the employer and the employee contribute. [Cases: Pensions  101–107. C.J.S. Pensions and Retirement Plans and Benefits §§ 53–68, 121–129.]

defined-contribution pension plan. See defined-contribution plan under EMPLOYEE BENEFIT PLAN.

defined pension plan. A pension plan in which the employer promises specific benefits to each employee. — Also termed fixed-benefit plan. [Cases: Pensions  28. C.J.S. Pensions and Retirement Plans and Benefits §§ 11–15.]

noncontributory pension plan. A pension plan contributed to only by the employer. [Cases: Pensions  28. C.J.S. Pensions and Retirement Plans and Benefits §§ 11–15.]

nonqualified pension plan. A deferred-compensation plan in which an executive increases retirement benefits by annual additional contributions to the company’s basic plan. [Cases: Pensions  28. C.J.S. Pensions and Retirement Plans and Benefits §§ 11–15.]

qualified pension plan. A pension plan that complies with federal law (ERISA) and thus allows the employee to receive tax benefits for contributions and tax-deferred investment growth. — Often shortened to qualified plan. [Cases: Pensions  28. C.J.S. Pensions and Retirement Plans and Benefits §§ 11–15.]

top-hat pension plan. An unfunded pension plan that is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of managers or highly paid employees. • Top-hat plans are generally not subject to the broad remedial provisions of ERISA because Congress recognized that certain individuals, by virtue of position or compensation level, can substantially influence the design or operation of their deferred-compensation plans. — Often shortened to top-hat plan. [Cases: Pensions  24.1, 28. C.J.S. Pensions and Retirement Plans and Benefits §§ 11–15.]

[Blacks Law 8th]