What factors affect the current value of pensions?

pensions come in many varieties, although these plans are usually categorized as a defined contribution or plans of defined benefits. The current value of pensions partly depends on the performance of basic securities such as stocks, bonds, deposit certificates and mutual funds. The values ​​of the defined benefit plan are also influenced by various riders who provide the holder's account of different levels of payouts at different time points. As a result, many pension plans include both the insurance value and the cash value; These two values ​​are rarely the same.

Defined contributions are pensions in which an individual or entity regularly creates deposits. The account owner usually cannot access the funds before retirement, but at that time he receives the amount of money equal to the current value of the account shares. In most cases, the plans of defined contributions contain shares of mutual funds and securities with fixed interest, such as deposit certificates (CD). MutualThe funds share daily because these funds actually invest in other securities such as stocks and bonds, while the CD usually has the main protection; CD holders can lose money from these products due to timely redemption sanctions. With defined contributions, the current value of pensions reflects the current market value of the underlying securities after adjustments to take into account any fines for the purchase.

with a plan of defined benefits, the account holder's contributions are usually invested in the Anuit. The company that issues an annuity usually agrees that the holder of the account will pay a one -time amount of money for the specified future date. Although the annuity contract loses money over time, the current value of pensions containing annuity often has to do with the annuity contracts than the current evaluation of the securities that the plan contains.

In some cases, the participants of the plan definedThe benefits decided to make the withdrawals before the due date of the plan. If this happens, the participant will receive a greater money or insurance value. The cash value represents the current pension value, while the insured value represents the amount of money that the plan operator promises to pay the Subscriber in the event of early withdrawal. The values ​​for insurance selection are often modified to take into account administrative fees and sanctions. Pension plan operators evaluate annual fees for these insurance riders and further exhaust the current value of the pensions.