Question

Explain what you understand to be the importance of pensions from a business perspective.

Answer 1

A pension is a fund into which a sum of money is added during an employee's employment. Some are universal benefits, given to all older people regardless of income, assets, or employment records. Others may have an opportunity to accumulate wealth without using pension schemes - perhaps through their business ventures or other assets.

pension helps you to maintain your standard of living in retirement, and savings provide important supplemental income for unforeseen expenses. Group pension plans provide guaranteed, monthly income for life, which makes financial security in retirement much more achievable for those who have them.importance of pensions from a business perspective are:

> in order to encourage pension schemes, the State provides tax relief on contributions made to pension schemes and the growth in their investments.

>when people come to retire they will experience a reduction in income - a pension makes up for some of this loss of income in retirement.

>pension schemes can provide protection in the form of lump sum and pension to dependent in the event of a member's death;