When your pension plan is just for the rich

  • July 1, 2021

Hacker News headline You can have a pension plan that’s not just for you and your family article Hacker Newswire title How to set up your own retirement plan article Hacker Blog post How to setup your own pension plan.

You might have heard of this one before, but it’s even easier now.

What you need to know before you start. 

What is a pension?

A pension is a payment from your employer to you as a reward for hard work.

The plan usually consists of an income pension, a retirement pension, or both. 

If your employer provides a pension to you, you can be paid a pension when you retire.

This can happen in retirement, during your work-life, or in retirement during a disability benefit.

The payouts are based on your age, work experience, and other factors.

You can’t be required to receive a pension.

If you are required to work, you will receive your pension when your employer requires you to do so. 

You may also receive a lump sum payment for the benefit.

You should consider the lump sum amount before deciding if it is appropriate to contribute to a pension as a lump-sum payment. 

How can I set up a pension for my employees?

You can set up an employee pension plan (EPP) if you: have a current employee; are an employee who has been employed for at least six months; and are at least 55 years old. 

To set up, you must have a working relationship with your employees, or you can create a new employee pension with your employer.

You may not set up the plan on your own. 

Employees who have a relationship with you must be at least 18 years old and in good standing. 

In addition to the employee pension, you may want to create a pension benefit for your dependents. 

Your plan can be used for up to 10 years, so it is usually more appropriate to start with the current employee pension. 

Do I have to contribute the money?


You have to set it up on your behalf and provide your employer with a signed declaration that you will pay the pension plan’s expenses, pay for the benefits, and maintain the plan. 

The plan must be set up with your consent, and you must provide your written consent before your employer can use it. 

Does it cover all types of retirees?

Yes, although the plan will not cover workers over 55. 

It can cover those who work on an hourly basis, or those who make regular, part-time, or salaried wages.

It can also cover retirees who have retired from a job where they have been unable to work due to a disability. 

Who will pay for it?

Your employer must pay for this pension plan to the government.

Your employer can deduct the money from your pay and from the money you receive from your pension.

This means that the employer will pay your pension payments, or it can deduct them from your wages. 

Which retirement plan is right for me?

Your decision about whether to set your own plan is best left to your employer, who will provide you with the appropriate information and help you make a decision. 

Is the plan covered by the retirement income pension?


It’s generally not covered by an income pensions.

If your plan is an income retirement pension (IRP), the income that you earn from your work is not considered income.

If the income from your employment is considered income, the employer must contribute the income and any expenses you would have incurred in setting up the pension, such as pension plans, health benefits, etc. Are there any other ways I can set this up?

You should carefully consider whether the pension you want to set-up is appropriate for your situation and your circumstances.

For example, if you work in a small business, your pension may not be appropriate for you.

If there is a large amount of cash in your retirement savings, it may not make sense to set a pension that covers a large part of that.

Also, you might want to consider whether your plan should cover you or your spouse or children if you are a partner or a widow. 

When will my pension pay out?

Your pension will pay out once you receive your retirement benefit. 

Why does my pension plan pay out so slowly?

When you retire, your income and contributions to your pension depend on the size of your paycheque and your earnings during your retirement. 

Depending on your employment, your retirement benefits may increase or decrease depending on your salary and other expenses.

This may make it harder or easier to set and maintain a pension if you don’t receive income from any of the other sources that contribute to your retirement income. 

Should I set a retirement benefit?

Your answer depends on how much you will be able to earn during your retirements.

If a pension is only for the people who have worked long enough to qualify, it might not be a good idea.

It may be more appropriate for people who are in their 60s