Tuesday, March 17, 2015
Bethlehem Township Changes Pension Plans For New Workers
What's the difference?
A defined benefit plan pays a retired employee a specific or defined benefit, based on years of service, If the stock market crashes and the pension fund struggles, the township has to dig into its own resources. Also, the payments continue until death. In contrast, a defined contribution plan is one in which an employee makes a defined contribution into a fund every year, which he can then draw down after retirement. The payments stop when the well runs dry. The employee also assumes the risk that the pension fund may perform poorly.
Township Commissioners also voted, at their March 16 meeting, to make different changes to the pension plans, mostly to enable gay married couples to participate.