Provisions and contributions define this classification.
Pension plans can define, at the time of its constitution, both the provision and the contribution that it is going to carry out to the above-mentioned plan:
- Pension plans are of defined provision when the amount of the provisions to be received is defined in them by payees. Once set the provision, the contribution the application of the system is obtained from financial-actuarial established in the pension plan and of the evolution of the return.
- They are of defined contribution when at the time of the creation of the pension plan the amount of the shareholders' contributions is defined and of the contributions of the developer. Therefore, the amount of the provisions not is determined up to now of the contingency as a consequence of the process of capitalisation developed by the plan.
- And are mixed in the event that, simultaneously, the amount of the provision and the amount of the contribution is defined.