Pay-as-you-go pension plan

A pay-as-you-go pension plan (also called a "pre-funded pension plan") is a retirement scheme in which a contributor can either have a regular contribution deducted from each paycheck or make a lump-sum contribution to a retirement fund.^[1]

With such a plan, the contributor decides how much to contribute to the fund and chooses how it is invested. Upon retirement, the contributor can have the fund balance paid in a lump sum, in monthly installments, or in a combination of the two.