In many ways, a pension plan is a method in which an employee transfers part of his/her current income stream toward retirement income. There are two main types of Pension Plans: Defined-Benefit Plans and Defined-Contribution Plans.
In a Defined-Benefit Plan, the employer guarantees that the employee will receive a definite amount of benefit upon retirement, regardless of the performance of the underlying investment pool.
In a Defined-Contribution Plan the employer and employee makes predefined contributions, but the final amount of benefit received by the employee depends on the investment’s performance.
Though the Insurance Act No. 8 of 2009 does not make any distinction between the two, the function of the Financial Services Regulatory Commission (FSRC) is to regulate/supervise Private Pension Plans and to ensure that the plan is compliant with the provisions for Private Pension Fund Plans under the Act.