James Lukezic Talks About What a Pension Plan is and How It Works

James Lukezic
Dec 10, 2019 · 2 min read

James Lukezic has over 20 years of experience as a retirement consultant and financial analyst for large corporations. Some of the companies James Lukezic has worked for include Merrill Lynch, Citigroup Global Markets, Wells Fargo, and Bank of America. He is also an expert in corporate retirement plan services. “My Firm is a leading ERISA Fiduciary Advisor to large corporate retirement plans of all kinds,” James says. Due to the complexity of these corporate plans, many participants and plan sponsors of these plans often find themselves confused as to best practices and retirement planning. James Lukezic explains it in this quick guide.

What is a Pension Plan?

A defined-benefit plan is an employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history. The Fiduciary Advisor is responsible with the firms Investment Committee for portfolio management and investment risk for the plan. There are also restrictions on when and by what method an employee can withdraw funds without penalties. Benefits paid are typically guaranteed for life and rise slightly to account for increased cost of living.

Breaking Down Defined-Benefit Plan

Defined-benefit plans, aka pension plans or qualified-benefit plans, are termed “defined benefit” because employees and employers know the formula for calculating retirement benefits ahead of time, and they use it to define and set the benefit paid out. According to James Lukezic, most pension plans get determined based on the length of service, annual salary, and the employee’s age.

Employees Must Pay Taxes on Payment Plans

James Lukezic mentions that pension plan beneficiaries still have to pay taxes on their plans. Of course, the amount of taxes employees pay will depend on whether or not they receive a lump sum or monthly payments throughout their retirement. If an employee has a disability, however, they might be able to have the taxes waived. Employees should talk to a tax professional before making a decision.

Difference Between a Pension vs. a 401(k)

Unlike a 401(k) plan, in a pension plan, employees don’t make investment decisions regarding their money. According to James Lukezic, Fiduciary Advisors are the ones who decide where they will invest their money.

Aside from advising large corporations, James Lukezic is also a sommelier, Chairman of ITF USA, a nonprofit organization that assists landmine victims in over 30 countries worldwide

James Lukezic

Written by

James Lukezic of Palm Beach, FL is a highly experienced financial advisor who graduated from Cornell Univeristy.

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