Pensions and Benefits

Employee benefits are defined as various non-wage compensations given to employees by their employers and are in addition to their normal, everyday wages. There is one main group of benefits known as fringe benefits. Fringe benefits include insurance, disability income, retirement benefits, tuition reimbursement, sick leave, vacation time, social security, profit sharing and paid time off. Pensions are defined as an arrangement to provide a person with an income when they are no longer earning a steady income from employment. Employees qualify for benefits when:

  • They have been working with a company for 90 days or more.
  • If the employee is considered a full-time employee (they work 40 or more hours per week).
  • They are not on their spouse's benefit plan (usually just for insurance coverage).
  • They have filed all the proper paperwork required to obtain the benefits offered by their place of employment.

It is unlawful for employers to withhold an employee's benefits for any reason other than insubordination or termination. If an employer guarantees that an employee will receive benefits after they complete their 90-day probationary period than that employee should be given benefits. If not, then that employee should contact an employment attorney immediately to discuss their situation.


One of the most common ways for employers to offer benefits to their employees is through cafeteria plans. Cafeteria plans are benefit plans that include a variety of options for employees to choose from when deciding how they want to structure their individual benefits package. In the majority of these instances, the plans are funded dually by the employer and the employee. The portion of the funding that comes from the employee is deducted from their paycheck prior to state and federal taxation. Benefits that can be obtained via a cafeteria plan are:

  • Health insurance
  • Dental coverage
  • Life insurance
  • Accident insurance
  • Flexible spending accounts
  • Life premiums
  • Health premiums
  • Vacation time

An employee's 401k that falls under a cafeteria plan can still be taxed under FICA but most health premiums and life premiums cannot be taxed under FICA. Benefits are offered universally across the country and usually become active after an employee is with a company for 90 days or more.


The majority of pensions are granted upon a person's retirement from the workplace and they are then known as a retirement plan. Pension plans are set up by the employee, the employer, the government, insurance companies, employer associations or trade unions. Retirement pensions are set up in the form of a guaranteed annuity. The terms of the pension plan are determined via a contractual agreement and the person receiving the pension plan is deemed a pensioner or retiree. The three types of pension plans are:

  • Employment based pensions
  • Social or state pensions
  • Disability pensions

Anyone that has been denied their employee benefits or their pension plan should consult an employment attorney immediately. An employment attorney will be able to help the person in question fill out all the required paperwork as well as determine whether or not their benefits or pension plan are being withheld illegally.

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