A pension plan is a type of retirement plan that is established by an employer to provide financial benefits to employees upon their retirement. It requires the employer to make regular contributions to a pool of funds that are set aside specifically for the future retirement benefits of the workers. The contributions to the pension plan are invested, typically with the goal of generating returns and growing the fund over time. Upon retirement, employees receive regular pension payments, either as a lump sum or as periodic income, based on factors such as their years of service and salary history. Pension plans aim to provide employees with a stable income during their retirement years.
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