ANNUAL PENSION Meaning and
Definition
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An annual pension refers to a fixed sum of money that is paid to a retired individual on a yearly basis. It is typically provided by an employer or the government as a form of income replacement after the individual has reached a certain age or met specific eligibility criteria.
The concept of an annual pension is based on the idea that individuals work and contribute to a pension fund during their active years to secure a steady source of income after retirement. The amount of the annual pension payment is often calculated based on factors such as the years of service, salary history, and the specific pension plan in place.
Annual pensions are designed to ensure that retirees have a reliable income stream to cover their living expenses and maintain their standard of living during their non-working years. The payment frequency of an annual pension is typically once a year, although in some cases, the payments may be made monthly or quarterly.
An annual pension may be contributed to by both the employer and the employee, with some pension systems allowing individuals to make voluntary contributions to increase the size of their pension fund. The funds are then invested over time, so they can grow and generate returns that contribute to the size of the annual pension payments.
Overall, an annual pension provides retirees with financial security, stability, and a source of income to support their needs throughout their retirement years.
Etymology of ANNUAL PENSION
The etymology of the phrase "annual pension" can be traced back to different origins.
1. Annual: The word "annual" comes from the Latin word "annus", which means "year". It entered the English language through the Old French word "annuel", ultimately derived from Latin. It refers to something that occurs or is done once every year.
2. Pension: The word "pension" has its roots in the Latin word "pensio", which means "payment" or "pension". It originally denoted a regular payment or allowance made to a person, often after retirement, as an income or financial support. The term "pension" entered English through Old French and eventually acquired its present-day meaning.
