Tennessee Defined-Benefit Pension Plan and Trust Agreement

• Category: Trusts - Business
• State: Multi-State
• Control #: US-1073BG
• Format: Word; Rich Text

Description

A defined benefit pension plan is a type of pension plan in which an employer or sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provided defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay. A defined benefit plan is "defined" in the sense that the benefit formula is defined and known in advance. Conversely, for a "defined contribution retirement saving plan", the formula for computing the employer's and employee's contributions is defined and known in advance, but the benefit to be paid out is not known in advance.

Tennessee Defined-Benefit Pension Plan and Trust Agreement is a comprehensive retirement benefit program established by the state of Tennessee to provide financial security to eligible workers upon retirement. This pension plan is designed to offer a stable source of income to retired employees, offering them peace of mind and economic support during their later years. The Tennessee Defined-Benefit Pension Plan and Trust Agreement is a legally binding contract between the state government and participating employees. It outlines the terms and conditions of the pension plan, including the eligibility criteria and retirement benefits calculations. It is important to note that there may be variations in the plan based on the date of hire, specific job classifications, and employee contributions. Some different types or variations of the Tennessee Defined-Benefit Pension Plan and Trust Agreement may include: 1. State Employee Pension Plan: This variation of the pension plan is specifically tailored for employees working within various state agencies, departments, and institutions across Tennessee. It encompasses a broad range of job classifications and offers retirement benefits based on years of service and average final compensation. 2. Teacher Retirement System: This specific branch of the pension plan is designed to cater to the retirement needs of educators and school personnel in Tennessee. It provides retirement benefits based on years of service, average final compensation, and contributions from both the employee and their employer. 3. Municipal Pension Plan: This type of pension plan is created for employees working within city or municipal governments in Tennessee. It offers retirement benefits similar to the state employee plan but may have variations in terms of contribution rates and eligibility requirements specific to each municipality. 4. Police and Firefighter Pension Plan: Primarily aimed at police officers and firefighters, this variation of the pension plan is tailored to meet the retirement needs and risks associated with these public safety occupations. It often allows for early retirement options and provides additional benefits to acknowledge the physical demands and inherent dangers of the job. In summary, the Tennessee Defined-Benefit Pension Plan and Trust Agreement is a state-sponsored retirement benefit program offered to different sectors of public-sector workers, including state employees, teachers, municipal employees, and public safety personnel. It provides a reliable income source during retirement, based on factors like years of service and average final compensation. The plan helps ensure a financially secure future for eligible employees who have dedicated their careers to serving the state of Tennessee.