Private employers offer retirement plans to its workers to enable them to have financial security in the future. To know what awaits you in retirement, you should first understand how your plan works and what benefits you will receive.

There are two common types of retirement plans that most employers offer:

• Defined benefit plan

It is retirement plan being funded by the employer, which promises you a specific monthly benefit at retirement. Benefits from this plan are calculated using factors such as age, salary, and the number of years you worked in the company.

• Defined contribution plan

It is a plan funded by you and your employer’s contributions to your individual account in the plan. In this kind of plan, you are responsible for choosing where to invest your contribution and decide on how much can be deducted from your paycheck. Your employer will add to your account by matching a certain percentage of your contribution. You will receive the balance of your account upon retirement, which will reflect gains or losses from the investment, the amount of contributions made, and any fees charged to your account.

How to participate and earn your retirement benefits

After knowing what kind of retirement plan your employer, is offering, you must know how to participate in it to start earning your retirement benefits.

• First, find out if you are within the group of employees covered by the employer’s retirement plan.
• Find out how to participate and contribute to your retirement plan after you start working in the company.
• Read the Summary Plan Description of your plan.
• Learn how to start earning benefits and how much your retirement benefits will be.

When do you start to receive your retirement benefits?

Under the law, you begin to receive your retirement benefits when you reach age 65 or the age your plan considers to be normal retirement age, or equivalent to 10 years of service.

However, in determining when you can receive benefits, three things must be considered:

• The start of receiving benefits from plans is provided for by the guidelines in the federal law.
• Plans can choose when to begin paying benefits as expressed in the plan documents.
• A claim for benefits must be filed to initiate payment of the benefits.

In filing for a benefits claim, the law requires all plans to have a written procedure in the Summary Plan Description. The document will also show a guide on how to file an appeal in case a claim is denied.

Some retirement plans offered by employers are governed by federal laws and guidelines in the Employee Retirement Income Security Act of 1975 (ERISA) and the Internal Revenue Code. On the other hand, the plan rules and regulations are contained in the Summary Plan Description.

If the plan failed to follow certain requirements of ERISA or claim is denied, you may seek the legal advice of a retirement benefits attorney. A retirement benefit attorney is an experienced lawyer who can best address your issue or concern.