Understanding the intricacies of pension plans is crucial for success in the TOEIC Reading section. This skill is particularly important for professionals aiming to work in international business environments. Let’s dive into a practice test that focuses on comprehending pension plan details, a common topic in TOEIC exams.
TOEIC Reading Practice Test: Pension Plans and Employee Benefits
Part 1: Incomplete Sentences
-
The company’s pension plan is __ to all full-time employees who have completed one year of service.
A) available
B) accessible
C) approachable
D) attainable -
Employees must __ at least 5% of their salary to the pension fund to receive the full company match.
A) contribute
B) donate
C) give
D) offer -
The vesting schedule determines how much of the employer’s contributions an employee can keep if they leave the company __ retirement.
A) before
B) after
C) during
D) while -
Pension benefits are typically calculated based on the employee’s __ salary and years of service.
A) average
B) current
C) starting
D) highest -
Many companies are shifting from __ benefit plans to defined contribution plans to reduce their financial liability.
A) defined
B) fixed
C) flexible
D) variable
reading employee retirement plan details
-
Employees should carefully review their annual pension __ to ensure all information is accurate.
A) statement
B) report
C) document
D) summary -
The pension plan’s __ date is the earliest age at which an employee can start receiving benefits without penalty.
A) normal retirement
B) early retirement
C) mandatory retirement
D) phased retirement -
Some pension plans offer a __ option, allowing retirees to receive a portion of their benefits while still working part-time.
A) phased retirement
B) partial withdrawal
C) gradual exit
D) flexible disbursement -
Employees nearing retirement should consider seeking advice from a financial __ to optimize their pension benefits.
A) advisor
B) planner
C) consultant
D) expert -
The company’s pension plan is __ by the government to protect employees’ retirement savings.
A) insured
B) guaranteed
C) backed
D) supported -
Employees can often choose to receive their pension as a __ payment or as regular monthly payments.
A) lump sum
B) one-time
C) bulk
D) complete -
The accrual rate determines how quickly an employee’s pension benefits __ over time.
A) accumulate
B) increase
C) grow
D) expand -
Some pension plans offer a __ of living adjustment to help retirees maintain their purchasing power over time.
A) cost
B) standard
C) quality
D) index -
Employees should be aware of any __ clauses in their pension plan that may affect their benefits under certain circumstances.
A) forfeiture
B) cancellation
C) termination
D) suspension -
The pension plan’s __ outlines all the rules and regulations governing the retirement benefits.
A) summary plan description
B) policy document
C) guidebook
D) manual -
Many companies offer __ pension plans that allow employees to make investment decisions for their retirement savings.
A) self-directed
B) autonomous
C) independent
D) personal -
Employees should understand the __ options available for their pension benefits in case they change jobs before retirement.
A) portability
B) transfer
C) rollover
D) conversion -
Some pension plans include a __ benefit that continues to pay a portion of the pension to a surviving spouse after the retiree’s death.
A) survivor
B) inheritance
C) legacy
D) continuation -
The __ of a pension plan refers to the total amount of money set aside to pay current and future benefits.
A) funding status
B) financial health
C) monetary position
D) economic condition -
Employees should be aware of any __ periods required before they become eligible to participate in the company’s pension plan.
A) waiting
B) probation
C) qualification
D) initiation -
Some pension plans offer __ options, allowing employees to customize their retirement benefits to suit their individual needs.
A) flexible
B) adaptable
C) adjustable
D) variable -
The pension plan’s __ is responsible for managing the fund’s investments and ensuring its financial stability.
A) trustee
B) administrator
C) manager
D) director -
Employees should understand the __ rules for their pension benefits, including any penalties for early withdrawal.
A) distribution
B) payout
C) disbursement
D) allocation -
Some companies offer a __ pension plan that combines features of both defined benefit and defined contribution plans.
A) hybrid
B) mixed
C) blended
D) composite -
The pension plan’s __ rate is used to calculate the present value of future benefit payments.
A) discount
B) interest
C) reduction
D) adjustment -
Employees should be aware of any __ limits on their pension contributions to avoid tax penalties.
A) maximum
B) ceiling
C) cap
D) threshold -
Some pension plans offer __ options, allowing employees to purchase additional years of service credit to increase their benefits.
A) buyback
B) purchase
C) acquisition
D) procurement -
The pension plan’s __ determines how much of an employee’s salary is used to calculate their retirement benefits.
A) compensation base
B) salary framework
C) pay structure
D) wage foundation -
Employees should understand the __ requirements for their pension benefits, including any minimum age or years of service needed.
A) eligibility
B) qualification
C) criteria
D) standards -
Some pension plans offer a __ feature that allows employees to receive a portion of their benefits while still working reduced hours.
A) partial retirement
B) semi-retirement
C) gradual withdrawal
D) phased exit
Part 2: Text Completion
Text 1:
Pension plans are an essential part of many employees’ retirement strategies. A well-designed pension plan can provide financial security and peace of mind for workers as they approach retirement age. However, (31) the details of these plans is crucial for making informed decisions about one’s financial future.
One key aspect of pension plans is the concept of vesting. This refers to (32) an employee gains the right to the funds their employer has contributed to their pension account. Typically, companies use a vesting schedule that (33) over time, meaning that the longer an employee stays with the company, the larger percentage of employer contributions they can keep if they leave before retirement.
Another important factor to consider is the type of pension plan offered. Defined benefit plans guarantee a specific payout amount based on factors such as salary and years of service, while defined contribution plans, (34) 401(k)s, depend on investment performance and employee contributions.
-
A) understand
B) understanding
C) understood
D) to understand -
A) when
B) where
C) which
D) what -
A) increases
B) increasing
C) increased
D) to increase -
A) such as
B) like as
C) same as
D) as like
Text 2:
When reviewing your pension plan, it’s important to pay attention to the (35) details that can significantly impact your retirement income. One such detail is the benefit formula, which determines how your pension payout is calculated. This formula typically takes into account factors such as your years of service and average salary.
Another crucial aspect is the (36) age specified in your plan. This is the age at which you can start receiving full pension benefits without any penalties. Some plans also offer early retirement options, but these often come with reduced benefits.
It’s also essential to understand the (37) options available under your pension plan. Many plans offer a choice between receiving your benefits as a lump sum payment or as a series of regular monthly payments. Each option has its own (38) and disadvantages, and the best choice depends on your individual financial situation and goals.
-
A) key
B) main
C) primary
D) central -
A) retirement
B) retiring
C) retired
D) retire -
A) payout
B) paying
C) payment
D) paid -
A) advantages
B) benefits
C) profits
D) gains
Text 3:
Pension plans often include provisions for (39) benefits, which can provide financial security for your spouse or other beneficiaries after your death. These benefits typically pay a percentage of your pension to your designated beneficiary for the remainder of their life.
It’s also important to be aware of any (40) of living adjustments (COLAs) included in your pension plan. These adjustments help protect the purchasing power of your pension benefits against inflation by increasing your payout amount over time.
For employees who change jobs frequently, understanding the (41) options for their pension benefits is crucial. Some plans allow you to transfer your benefits to a new employer’s plan or roll them over into an Individual Retirement Account (IRA). (42) these options can help ensure you don’t lose valuable retirement savings when changing jobs.
-
A) survivor
B) surviving
C) survived
D) survive -
A) cost
B) price
C) expense
D) value -
A) portability
B) portable
C) port
D) porting -
A) Knowing
B) Known
C) Know
D) To know
Text 4:
When participating in a pension plan, it’s important to regularly review your (43) statements. These documents provide valuable information about your accrued benefits, vesting status, and projected retirement income. By carefully examining these statements, you can ensure that your employer is making the correct contributions and that your benefits are accumulating as expected.
Many pension plans also offer (44) tools and resources to help employees better understand and manage their retirement benefits. These may include online calculators, educational workshops, and access to financial advisors. Taking advantage of these resources can help you make more informed decisions about your retirement planning.
Finally, it’s crucial to stay informed about any changes to your pension plan. Employers may occasionally (45) their plans, which could affect your benefits. By staying up-to-date on plan modifications and understanding how they impact your retirement income, you can (46) your financial strategy accordingly and ensure a more secure retirement future.
-
A) pension
B) retirement
C) benefit
D) savings -
A) additional
B) extra
C) supplementary
D) auxiliary -
A) modify
B) change
C) alter
D) adjust -
A) adapt
B) adjusting
C) modify
D) change
reading employee retirement plan details
Answer Key
Part 1: Incomplete Sentences
- A) available
- A) contribute
- A) before
- A) average
- A) defined
- A) statement
- A) normal retirement
- A) phased retirement
- A) advisor
- A) insured
- A) lump sum
- A) accumulate
- A) cost
- A) forfeiture
- A) summary plan description
- A) self-directed
- C) rollover
- A) survivor
- A) funding status
- A) waiting
- A) flexible
- A) trustee
- A) distribution
- A) hybrid
- A) discount
- C) cap
- A) buyback
- A) compensation base
- A) eligibility
- A) partial retirement
Part 2: Text Completion
Text 1:
31. B) understanding
32. A) when
33. A) increases
34. A) such as
Text 2:
35. A) key
36. A) retirement
37. C) payment
38. A) advantages
Text 3:
39. A) survivor
40. A) cost
41. A) portability
42. A) Knowing
Text 4:
43. A) pension
44. C) supplementary
45. A) modify
46. A) adapt
TOEIC Reading Answer Key: Pension Plan Details
Understanding The Details Of Pension Plans is crucial for TOEIC test-takers, especially those aiming for careers in international business. This practice test covers key aspects of pension plans, including vesting schedules, types of plans, benefit calculations, and retirement options. By mastering these concepts, you’ll be better prepared to tackle similar questions in the actual TOEIC Reading section.
Remember to pay close attention to terminology related to pension plans, such as “vesting,” “defined benefit,” and “rollover options.” These terms are commonly used in business English and are likely to appear in TOEIC exams. Additionally, understanding the structure of pension plan documents and statements will help you quickly locate and comprehend relevant information in reading passages.
As you continue to prepare for the TOEIC Reading section, focus on expanding your vocabulary related to employee benefits and retirement planning. Practice reading financial documents and company policies to familiarize yourself with the language and structure commonly used in these materials. With consistent practice and attention to detail, you’ll improve your ability to understand and analyze complex information about pension plans and other employee benefits.
