A pension plan is a long-term retirement savings and income plan designed to provide steady, tax-deferred income to employees throughout their retirement years. Pension plans are funded by employers through regular contributions, usually based on a percentage of the employee’s salary. Upon retirement or other specified age or event, benefits are distributed in the form of periodic payments over the length of the retiree’s life or other designated period. Pension plans are an important part of any comprehensive retirement plan and can provide both security and peace of mind.