Basic Facts About Pensions

A pension is a type of employee compensation paid upon retirement. Usually, both the employee and employer contribute toward the pension every pay period. These funds are pooled and invested to ensure funds are available over the long term to pay promised benefits when they are due. The employee is eligible to collect the pension when they reach a specified retirement age and stop work. Marin County Government, like most public agencies, offers a “defined benefit” that is a known amount upon retirement, along with a capped cost of living adjustment to help address inflation. This differs from a “defined contribution” retirement plan where the amount put in (usually by a combination of employee and employer) is known and the payout in retirement varies based on investment earnings.