401(k) Pension: A defined contribution pension plan where employees can accumulate retirement savings by contributing a portion of their salary before taxes. This amount is transferred to a 401(k) account, and employees can choose the investment direction of their pension. In some pension plans, employers also contribute a certain percentage to the employee's contributions. Basic and safe harbor 401(k) pensions may have additional employer contributions and conditions for receipt.

Automatic Enrollment: Employers can automatically enroll employees in retirement pension plans such as 401(k) and basic IRA pensions, directing a portion of their salary into a predetermined investment method. Employees can later cancel this enrollment or change their investment method (can switch to a basic IRA).

Accrued Benefits: Benefits accrued according to guaranteed pensions, where employees receive a certain amount regularly after retirement.

Cash Balance Pension: Similar to a defined contribution pension, but employees maintain a separate account, which is credited based on their credit. Cash balance pensions can be paid out more as a lump sum than traditional defined contribution pensions. (For more details, see the Department of Labor's "Cash Balance Pension Plans: Questions and Answers".)

Defined Benefit Pension: A pension plan that guarantees a fixed monthly amount to employees after retirement. This amount is calculated based on salary, age, years of service, etc.

Defined Contribution Pension: A system where employees or employers, or both, contribute to a pension account. Employees decide the amount to contribute, which determines the investment method, and the account's value can fluctuate based on investment performance. This pension is taxed later.

Employee Retirement Income Security Act (ERISA) of 1974: A federal protection law established to protect retirement pensions, which regulates the provision of information about retirement pension plans, fund management and guidance, setting enrollment and receipt criteria, providing trustees, handling benefit-related requests and appeals, and granting the right to sue for wrongful acts and behaviors. ERISA guarantees the payment of certain benefits through the PBGC (Pension Benefit Guaranty Corporation) if a defined benefit pension is terminated.

Employee Stock Ownership Plan (ESOP): A defined contribution pension plan that operates primarily on the distribution of company stock to employees.

Personal Benefit Statement: A personal statement that periodically provides information about an employee's retirement pension benefits, accumulated benefits, and receipt benefits. Additional information may be included based on the investment direction and plan of the 401(k) pension.

Individual Retirement Account (IRA): A personal account opened at financial institutions such as banks, insurance companies, and securities firms, allowing for investment growth and tax deferral. Operated separately from ERISA, it allows for the transfer of existing retirement pension plans to an IRA upon leaving a job. An IRA is also recognized as a retirement pension.

Cash Purchase Pension — A pension to which the employer contributes annually for employees, following the payment policy.

Multiple Employee Pension — A retirement pension composed through cooperation among multiple employees under various conditions. The pension remains the same even if the job changes.

Pension Administrator — A person responsible for operating and managing the pension. This can be an employer, an executive, or a practitioner.

Pension Documentation — Documented materials explaining how the pension is operated and established.

Pension Trustee — A person who operates or organizes the pension, managing overall pension assets, investments, and advice for a certain fee.

Trustee — A person who manages and has authority over the assets and contents related to the pension. The trustee manages the pension's assets and investments.

Pension Year — A 12-month period for scheduling retirement pension receipt. It can be based on the calendar year, for example, from July 1 to June 30 of the following year.

Distribution Pension — A pension that can be received annually during the pension period (in cash or employee stock dividends), with options for the recipient. There are criteria for the distribution to the pension participants.

Extension — The process where an employee leaves and maintains the retirement pension plan while transferring to the next individual retirement account or pension. This method helps maintain benefits and avoid tax penalties.

Safe Harbor 401(k) — Similar to a traditional 401(k) pension, but employers are required to contribute to each employee. The amount contributed by the employee is immediately 100% vested. Safe Harbor 401(k) reduces operational burdens and simplifies the complex tax calculations of traditional 401(k).

Customized Incentive Savings Pension for Employees (Basic) — Small businesses with fewer than 100 employees can provide retirement pensions through a portion of salary and appropriate contributions (similar to 401(k)). Can proceed as a basic IRA or basic 401(k). The basic IRA reduces the burden on employees in terms of operation, with automatic processing done by financial institutions or banks. Each has different features such as loan limits and contribution limits, but both methods allow for immediate 100% vesting.

Simplified Employee Pension (SEP) Pension — Based on tax criteria, employers contribute to each employee's individual retirement account (IRA). If certain conditions are met, separate reporting for most retirement pension plans is not required. SEP is available when employers are allowed to contribute to employees' IRA.