Government Pensions

 

 

Retirement is a reality no one can avoid. The realization of life after work is harsh for most people. This is why pensions are the most important components of a financially secure life after retirement. Envisioning a healthy and wealthy lifestyle is not difficult with some judicious utilization of various government sponsored pension schemes. The dynamics of today’s workplace have reinforced this fact and improve one’s chances of retiring on a sound financial nest egg.[br]

 

Government Pensions in the UK

Government pensions in state or simply basic state pensions are paid to people when they reach the state pension age, based on National Insurance contributions. The state pension age for men is 65 years and for women in 60. At present, men need 44 qualifying years and women need 39 qualifying years to get full state pension. From April 6, 2010, the qualifying years for both men and women is to be reduced to 30 years.

 

The UK government also gives pension credits to people, who have been out of work, looking after children or caring for someone for a long time. It also reduces the number of qualifying years to get a state pension.

 

The basic state pension is ₤95.25 per week for a single person and ₤152.30 per week for a couple under the current government guidelines.

 

Government Pensions in the USA

In the United States, the Federal Employee Retirement System (FERS) is the government sponsored pension scheme for qualified citizens. The FERS has three components:

• Social Security

• Thrift Saving Plan (TSP), such as 401K, usually matched at 4%.

• Basic Annuity, which is 1% of one’s high-3-average pay multiplied by his/her number of eligible years in service, where the high-3-averaged pay is the average of one’s three consecutive highest salaries. Eligible years include any military service the person completed.[br]

 

Government Pensions in Canada

Government pensions in Canada are broadly classified into Canadian Pension Plans (CPP) and Old Age Security (OAS).

 

The CPP is a contributory, social insurance program, which provides benefits on retirement, disability and death. The program covers all employed and unemployed individuals between the ages of 18 and 70, and those who meet certain minimum earning standards.

 

Any person who has made contributions to the CPP is eligible to receive a monthly pension after his/her 60^th birthday.

 

Old Age Security (OAS) is a social insurance program that provides a basic pension income, to anyone aged 65 and over, who fulfills certain residence requirements. OAS is financed from the tax revenues of the Federal Government.