Millions of American workers depend on private pensions to help fund their retirement. The life insurance industry is one of the biggest providers of private pensions to large and small employers alike.
Pensions are part of the full range of retirement products offered by life insurers.
Pensions, combined with Social Security and personal savings, are the primary components of retirement income. Benefits often are calculated as a percentage of pre-retirement pay. In a defined benefit plan, the employer bears the investment risk, and benefits are guaranteed by the federal government. A defined contribution plan generally is funded by a combination of employer and employee contributions. Retirement benefits are based on the sum of contributions and earnings on invested contributions over the years.