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Canadian Teachers’ Pension Fund Buys Majority Stake In Heartland Dental

What Is Pension

An employer sets aside a part of the pay for his employee, to be accessed by the employee after retirement. This is to help the employee in the future. This pool of money is invested and the returns earned on it are also enjoyed by the employee, after retirement.

Some fund houses allow both the employer and the employee to contribute towards this fund. The employee can pay up a part of his income towards this fund and his employer can match it or match up to a percentage of the annual contribution.

Types Of Plans

The different types of pension plans are:

  • Defined Benefit Plan

In this type of a pension plan, the employee is guaranteed by the employer, that he will get a fixed amount on retirement, irrespective of the performance of the investment pool or the returns earned from it. Once the employee retires, he is eligible to get a fixed amount on a regular basis, from this investment pool. However, if the investment does not earn enough or is not sufficient to pay out the required amount, the company has to match up the difference.

  • Defined Contribution Plan

The employer invests for the employee  matching up the employee’s contribution, at varying degrees. Here the final payment made to the employee on retirement depends upon the performance of the investment. The company is liable only up to the amount to be paid as contribution to the pool. Once these contributions are made, the company’s liability ends. More companies are moving towards this plan and ending the traditional pension plans, as the liability is lesser and if the investment returns are not sufficient, the company need not pay for it.

How Do These Pensions Help

When a company invests for the employee, it is ensuring the employee has enough funds to lean back up on once he retires. When the active earning days are over, many suffer due to inadequate income and inability to save up for a secured future. When part of the income is set aside on a regular basis, it automatically brings down the spending and increases the saving.

There are instances where an employee retires richer than what he was when he was actively earning. This is because the contributions made by both the employee and employer can earn good returns and result in a high payout. If such investments are made from the start, the investment tends to accumulate and grow until the employee works in that company. Sometimes, the employee from a lower level, earning lesser than many in the company can retire much richer than his boss. It is like how regular use of Fresh Fingers can get one fresh smelling feet for longer hours than the feet that are washed constantly.

Stranger things have happened. Click here for the news release.

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About The Blog Author

Teresa Duncan received a degree of Master of Science in Healthcare Management from Marymount University. With over 22 years of healthcare experience (15 in dental), she has unique insight into the world of dentistry. Her specialty is helping dentists and managers increase revenue. By focusing on accounts receivable and insurance management, she helps dentists increase the value of their practice. As a member of the Association of Certified Fraud Examiners, she has a special interest in helping dentists identify and safeguard against employee embezzlement.

Teresa is founder and president of Odyssey Management.

She is a Fellow and Educator for the ICOI’s Association of Dental Implant Auxiliaries. Look for more articles from her regarding practice management, dental implants and oral health care news. She was named 2010’s ADIA Educator of the Year.

Teresa is a member-at-large on the board of the Academy of Dental Management Consultants.

Teresa is a Trustee for the auxiliary education-focused DALE Foundation.


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